NVIDIA’s shares surged by about 6 per cent on Tuesday, reaching a record high and closing the gap between its market value and that of Apple in a significant reshuffle among Wall Street’s top players.
Closing at $1,128, NVIDIA’s market capitalization hit $2.8 trillion, trailing Apple’s $2.9 trillion market value, making Apple the second most valuable company after Microsoft.
During the trading session, NVIDIA’s stock soared as high as 8 per cent to $1,149.39, marking an intra-day record high, while Apple’s stock experienced a slight dip of 0.2 per cent in afternoon trading.
NVIDIA’s recent surge comes after it projected second-quarter revenue above Wall Street’s expectations and announced a stock split, garnering excitement from investors betting on the AI giant.
Derren Nathan, head of equity analysis at Hargreaves Lansdown, remarked, “The market has been struggling to keep up with the company’s ever-improving growth trajectory. At a mid-thirties forward earnings multiple, this still doesn’t feel like bubble territory."
NVIDIA’s shares have more than doubled year-to-date following last year’s over 200 per cent surge, making it one of the hottest stocks in the market.
The company, a major player in the AI sector, reported a significant five-fold increase in revenue in its data centre segment last week, indicating strong demand for its high-performance chips.
Tech giants like Microsoft, Amazon, and others have been vying for NVIDIA’s premium chips as they compete to dominate the AI computing landscape.
Dan Coatsworth, investment analyst at AJ Bell, commented on NVIDIA’s rally, saying, “Business is doing incredibly well, there are so many opportunities to keep growing, and the AI theme still has legs."
Meanwhile, Apple, a long-time Wall Street favourite, has underperformed compared to other Big Tech companies lately, with its shares falling around 2 per cent this year due to weak iPhone demand and stiff competition in China.
Microsoft, surpassing Apple earlier this year, claimed the title of the world’s most valuable company, riding on early investments in artificial intelligence across its cloud services.
Apple’s slower adoption of generative AI, has also contributed to its lag behind rivals like Microsoft and Google, who are integrating the technology into their products.
(With inputs from agencies)
