Nvidia has dethroned Apple to become the world’s most valuable company, thanks to an unprecedented surge in its stock. This rise is driven by the skyrocketing demand for its specialized AI chips. These chips have become essential in the rapidly growing artificial intelligence sector.
On Friday, Nvidia’s market value briefly reached $3.53 trillion, just edging past Apple’s $3.52 trillion, according to data from LSEG. Nvidia’s stock closed up 0.8% with a final value of $3.47 trillion, while Apple’s shares rose 0.4%, settling its market cap at $3.52 trillion.
Earlier this year, Nvidia had briefly claimed the top spot, only to be overtaken by both Apple and Microsoft. The three tech giants have remained close competitors for months, with Microsoft now valued at $3.18 trillion.
AI Dominance Boosts Nvidia’s Value
As more businesses integrate AI into their operations, the demand for Nvidia’s chips continues to soar. Nvidia, based in Silicon Valley, leads the market for processors crucial for AI computing. This has positioned the company as the biggest winner in the competition among tech titans like Microsoft, Google, and Meta, all of which are racing to dominate the AI space.
In October alone, Nvidia’s stock has surged by 18%, bolstered by major developments like OpenAI’s recent $6.6 billion funding round. Nvidia’s gains were further boosted by Western Digital’s strong quarterly performance, signaling high demand in data centers.
The Sweet Spot for AI Investment
“Nvidia is in a sweet spot, and as long as the U.S. avoids a severe economic downturn, companies will keep investing in AI, which is a healthy tailwind for Nvidia,” said Russ Mould, investment director at AJ Bell. With businesses doubling down on AI capabilities, Nvidia’s leadership in the semiconductor market looks increasingly secure.
On the flip side, Apple has been facing challenges, particularly with weaker demand for its smartphones. iPhone sales in China fell by 0.3% in the third quarter, while Huawei’s sales jumped by 42%, a significant shift in the competitive landscape.
As Nvidia thrives and now holds the spot as the world’s most valuable company, all eyes are now on Apple’s upcoming earnings report. Analysts expect Apple’s revenue to grow 5.55% year-over-year to $94.5 billion. However, Nvidia’s projected revenue growth dwarfs Apple’s, with expectations of an 82% increase to $32.9 billion.
