Nvidia shares surged to a record high on Wednesday, pushing the artificial intelligence chipmaker’s valuation to more than $3 trillion and overtaking Apple to become the world’s second-most valuable company. Nvidia is also preparing to split its shares ten to one, effective June 7, in an effort to make the company more attractive to individual investors.
Nvidia’s rise in market value above Apple’s marks a significant shift in Silicon Valley, where Apple, co-founded by Steve Jobs, has dominated since the 2007 launch of the iPhone. Nvidia shares rose 5.2% to close at $1,224.40, valuing the company at $3.012 trillion. Meanwhile, Apple’s market capitalization was $3.003 trillion after the company’s shares rose 0.8%.
“Nvidia is currently making money on artificial intelligence, and companies like Apple and Meta are spending money on it,” said Jake Dollarhide, CEO of Longbow Asset Management. “We can predict in advance that Nvidia will also overtake Microsoft. “What they think is a straight shot is going to get a lot of retail money.”
Nvidia shares are up 147% so far in 2024, driven by surging demand for its high-end processors. These processors are indispensable as Microsoft, Meta Platforms and Google owner Alphabet race to expand their AI computing capabilities and dominate the emerging technology. After excellent revenue forecasts, the company’s shares have increased by almost 30% since May 22.
On Wednesday alone, Nvidia added nearly $150 million to its market capitalization, more than AT&T’s entire value. Optimism around artificial intelligence also broadly lifted chip stocks, with the PHLX chip index rising 4.5%. Super Micro Computer, which sells AI-optimized servers built with Nvidia chips, rose 4%.
Nvidia CEO Jensen Huang has received extensive media coverage in Taiwan recently and received an enthusiastic welcome at the Computex technology fair in Taipei. Meanwhile, Apple faces challenges from frail iPhone demand and fierce competition in China, the world’s largest smartphone market. Some investors see Apple as lagging behind other tech giants in integrating artificial intelligence features into its products and services.
Despite Nvidia’s impressive profits, analysts’ forecasts for future profits have exceeded its stock price. According to LSEG data, Nvidia is currently trading at more than 39 times expected earnings, a significant decline from last year, when earnings were more than 70 times expected earnings.
The growing importance of Nvidia’s artificial intelligence
The chipmaker has seen a dramatic raise in demand for semiconductors, which are crucial in powering AI applications. Nvidia’s revenue more than tripled in the last quarter compared to the same period a year earlier. Wall Street expects Nvidia to bring in $117 billion in revenue in fiscal 2025, almost double its 2024 revenue and more than four times its revenue from the previous year.
Nvidia’s estimated net margin is 53%, significantly higher than Apple’s 26.3% and Microsoft’s 36.4%. Although Apple and Microsoft have higher total revenues, Nvidia’s profitability highlights its dominant position in the artificial intelligence market.
Wall Street’s reaction to Nvidia’s milestone
Wall Street stocks closed higher on Wednesday, with the S&P 500 and Nasdaq indexes reaching fresh highs as Nvidia crossed the $3 trillion market capitalization mark. The S&P 500 Index rose 1.2% to 5,354.03, while the Nasdaq Composite Index rose 2.0% to 17,187.90. The Dow Jones Industrial Average rose 0.3% to 38,807.33.
“You get the best of both worlds for the stock market, which is lower interest rates and strength in large-cap stocks, especially Nvidia,” said Briefing.com’s Patrick O’Hare. Other massive names including Meta Platforms gained 3.8% and Hewlett Packard Enterprise rose 10.7%. Apple shares rose 0.8%.
Economic data showed private sector employment fell more than expected in May, potentially giving the Federal Reserve confidence to cut interest rates sooner. All eyes are on the government’s jobs report, due on Friday, for further clues about the economy’s trajectory and potential adjustments to interest rates.
(With the participation of the agency)
Nvidia’s rise in market value above Apple’s marks a significant shift in Silicon Valley, where Apple, co-founded by Steve Jobs, has dominated since the 2007 launch of the iPhone. Nvidia shares rose 5.2% to close at $1,224.40, valuing the company at $3.012 trillion. Meanwhile, Apple’s market capitalization was $3.003 trillion after the company’s shares rose 0.8%.
Boost
“Nvidia is currently making money on artificial intelligence, and companies like Apple and Meta are spending money on it,” said Jake Dollarhide, CEO of Longbow Asset Management. “We can predict in advance that Nvidia will also overtake Microsoft. “What they think is a straight shot is going to get a lot of retail money.”
Nvidia shares are up 147% so far in 2024, driven by surging demand for its high-end processors. These processors are indispensable as Microsoft, Meta Platforms and Google owner Alphabet race to expand their AI computing capabilities and dominate the emerging technology. After excellent revenue forecasts, the company’s shares have increased by almost 30% since May 22.
On Wednesday alone, Nvidia added nearly $150 million to its market capitalization, more than AT&T’s entire value. Optimism around artificial intelligence also broadly lifted chip stocks, with the PHLX chip index rising 4.5%. Super Micro Computer, which sells AI-optimized servers built with Nvidia chips, rose 4%.
Nvidia CEO Jensen Huang has received extensive media coverage in Taiwan recently and received an enthusiastic welcome at the Computex technology fair in Taipei. Meanwhile, Apple faces challenges from frail iPhone demand and fierce competition in China, the world’s largest smartphone market. Some investors see Apple as lagging behind other tech giants in integrating artificial intelligence features into its products and services.
Despite Nvidia’s impressive profits, analysts’ forecasts for future profits have exceeded its stock price. According to LSEG data, Nvidia is currently trading at more than 39 times expected earnings, a significant decline from last year, when earnings were more than 70 times expected earnings.
The growing importance of Nvidia’s artificial intelligence
The chipmaker has seen a dramatic raise in demand for semiconductors, which are crucial in powering AI applications. Nvidia’s revenue more than tripled in the last quarter compared to the same period a year earlier. Wall Street expects Nvidia to bring in $117 billion in revenue in fiscal 2025, almost double its 2024 revenue and more than four times its revenue from the previous year.
Nvidia’s estimated net margin is 53%, significantly higher than Apple’s 26.3% and Microsoft’s 36.4%. Although Apple and Microsoft have higher total revenues, Nvidia’s profitability highlights its dominant position in the artificial intelligence market.
Wall Street’s reaction to Nvidia’s milestone
Wall Street stocks closed higher on Wednesday, with the S&P 500 and Nasdaq indexes reaching fresh highs as Nvidia crossed the $3 trillion market capitalization mark. The S&P 500 Index rose 1.2% to 5,354.03, while the Nasdaq Composite Index rose 2.0% to 17,187.90. The Dow Jones Industrial Average rose 0.3% to 38,807.33.
“You get the best of both worlds for the stock market, which is lower interest rates and strength in large-cap stocks, especially Nvidia,” said Briefing.com’s Patrick O’Hare. Other massive names including Meta Platforms gained 3.8% and Hewlett Packard Enterprise rose 10.7%. Apple shares rose 0.8%.
Economic data showed private sector employment fell more than expected in May, potentially giving the Federal Reserve confidence to cut interest rates sooner. All eyes are on the government’s jobs report, due on Friday, for further clues about the economy’s trajectory and potential adjustments to interest rates.
(With the participation of the agency)