Nvidia’s AI Wave Pushes Chipmakers Market Cap Past Apple’s
Nvidia has toppled Apple to become the world’s most valuable company. Buoyed by the Nvidia AI wave, the giant AI chip maker’s stock surged by 3% on November 5, 2024 to close the day with a $3.43 trillion market capitalization against Apple’s $3.4 trillion.
According to First Post, this is the second time that Nvidia’s market valuation has surged past Apples. Previously, Nvidia surpassed Apple in market valuation briefly then slipped back. Last month, Nvidia notched Apple’s market capitalization and moved closer to becoming the most valuable company in the world.
The Go-To AI Chip Supplier
Nvidia’s AI stocks have been rising in value and almost tripled in price in 2024. Over the last five years, Nvidia stocks have risen by a staggering 2,700%. This rise has been fueled by growing investor enthusiasm about Nvidia’s dominance in the AI market.
“Over the past several quarters, it has felt like people basically care about inflation numbers, job numbers, and Nvidia numbers. Nvidia overtaking Apple in market cap not only conveys that it is the biggest beneficiary of the AI infrastructure cycle, but it suggests people expect the AI boom will continue,” Fall Ainina, Research Director at James Investment Research said.
In recent years, Nvidia has become the go-to supplier for developing and deploying advanced AI technologies. The chip company makes powerful graphics processing units (GPUs), which include the Blackwell AI chips whose demand has risen significantly among big tech companies like Meta, Google, and Microsoft.
Major S&P 500 Index Company
Nvidia accounts for 7% of S&P 500 Index weight. The chip maker is responsible for about 25% of the benchmark’s gain this year. In June 2024, the chipmaker briefly held the largest company title.
The largest companies on Wall Street are highly exposed to AI. Apple’s newly unveiled iPhones, Alphabet, Amazon, and Microsoft with their AI services and cloud businesses, and Meta Platform need AI chips to run their systems. With the exception of Apple, all these tech giants have emphasized their commitment to continue spending on AI.
Nvidia AI chips regained their strength after the company confirmed that it had restored Blackwell AI chip production after experiencing delays for months due to engineering flaws.
Future Market Outlook
In the past quarter, Wall Street analysts consistently forecasted increased earnings and profits for They forecast the chip maker’s revenues to double in the current financial year and grow by about 44% in the coming fiscal year.
Besides the optimism around Nvidia’s Blackwell chips, recent sales by Taiwan Semiconductor Manufacturing Company demonstrate strong demand for AI. Just recently, OpenAI achieved a $10 billion liquidity after closing a $6.6 billion funding round that pushed its valuation to $157 billion. OpenAI’s funding is a reflection of growing investor interest in AI, which will continue to push Nvidia’s AI chip market growth.
“The implication of AI is extraordinarily large, and big tech companies are investing hundreds of billions into it, with Nvidia benefiting the most. Overall there continues to be a good picture for its prospects,” Ainina added.
Nvidia will be releasing its earnings report by the end of this month. Experts and analysts will be waiting to see whether AI can maintain its momentum and continue to push the chip maker’s profitability higher.
