Apple Dethroned By Nvidia As AI Races Makes Chipmaker 2nd Most Valuable Company

Despite Nvidia's headway, Microsoft continues to hold the top spot with a market capitalisation of $3.15 trillion.

This surge in value follows Nvidia's optimistic revenue forecast released on May 22. ( Image Source :nvidia )

Nvidia has overtaken Apple to secure the position of the world's second most valuable company as of Wednesday. The AI chip manufacturer reached a market valuation exceeding $3 trillion, driven by a relentless demand for its processors that are essential to the development of artificial intelligence technologies. Nvidia's stock experienced a notable increase, climbing 5.2 per cent to end the day at $1,224.40 per share, elevating its market capitalisation to $3.012 trillion.

This rise edged out Apple, which saw a slight gain of 0.8 per cent, bringing its market value to $3.003 trillion. Microsoft continues to hold the top spot with a market capitalisation of $3.15 trillion.

Nvidia's AI Rally

The impressive 147 per cent surge in Nvidia's stock price since the beginning of 2024 highlights the company's critical role in advancing AI technology. Major tech corporations, including Microsoft, Meta, and Alphabet (Google's parent company), are heavily investing in Nvidia's high-performance chips to enhance their AI capabilities.

This surge in value follows Nvidia's optimistic revenue forecast released on May 22, which significantly boosted market confidence and caused the stock to jump nearly 30 per cent. Furthermore, the company's planned ten-for-one stock split, scheduled for June 7, is anticipated to attract even more interest from individual investors.

AI's The Showrunner

Nvidia's ascent underscores a broader trend within the tech industry, where AI has become a central focus. Jensen Huang, Nvidia's CEO, has emerged as a prominent figure in the tech world, drawing large audiences at events like the recent Computex trade show in Taipei.

Conversely, Apple is encountering hurdles, including a slowdown in iPhone sales and increasing competition in the vital Chinese market. Analysts have also pointed out that Apple may be falling behind in incorporating AI into its products and services.

Despite its rapid growth, Nvidia's stock remains appealing based on future earnings projections. The company is currently trading at 39 times expected earnings, a significant decrease from its peak of over 70 times expected earnings just a year ago.