09/03/2024
Nvidia is on the verge of surpassing Apple as the world's second-most-valuable company, experiencing a remarkable surge in its shares driven by the increasing demand for its semiconductor chips powering popular AI tools like ChatGPT.
In just nine months, Nvidia's valuation has soared from $1 trillion to over $2 trillion, overtaking major players like Amazon, Google's Alphabet, and Saudi Aramco.
Currently valued at approximately $2.38 trillion, Nvidia lags behind Apple by around $230 billion and Microsoft by about $645 billion. The semiconductor maker's impressive rally has played a significant role in propelling Wall Street to record levels in the current year, with Nvidia holding more than a 5% weightage on the benchmark S&P 500 index.
Nvidia, dominating 80% of the high-end AI chip market, and Meta Platforms, both experiencing substantial year-to-date increases of 95% and 46.6%, respectively, have outperformed other members of the so-called Magnificent 7.
This underscores investors' insatiable appetite for AI-related assets. The rally is attributed to Nvidia's robust business model and speculative support from long option buyers. Despite Apple facing challenges with slowing iPhone sales, Nvidia's ascension highlights the growing significance of AI-related stocks in the market. Apple previously relinquished its position as the most valuable U.S. company to Microsoft in January.
