Nvidia surpasses Apple with a $3.007 trillion market cap, due to its 80% AI chip market dominance and rising data center sales.
Nvidia briefly eclipsed Apple to become the world’s second most valuable publicly traded company.
The market capitalization of Nvidia attained a peak of $3.007 trillion during intraday trading on Wednesday, which was slightly higher than Apple’s valuation of $3.005 trillion.
This change emphasizes the increasing investor interest in companies that are at the vanguard of the artificial intelligence (AI) revolution.
Nvidia’s Rise in the AI Market
Nvidia’s market capitalization has increased as a result of its leadership position in the AI chip market, which is estimated to have 80% market share.
The company has achieved significant profitability by concentrating on the development of GPUs for data centers. In the last quarter, the data center business generated 22.6 billion in sales, which accounted for 86% of the company’s total revenue.
This indicates a 427% increase from the previous year, which underscores the necessity of AI capabilities in various sectors.
Nvidia has successfully transitioned from a gaming hardware manufacturer to an AI technology company, a transition that has attracted significant investment.
As a result, the company’s shares have increased by over 24% since the release of its first-quarter earnings in May.
This growth trajectory has been maintained over the past year, with the stock price increasing by more than 3,290% in the past five years.
Comparative Performance with Apple
While Nvidia has skyrocketed, Apple has been relatively stable, with a 5% increase this year.
The US-based technology firm, which became the first American company to reach a $3 trillion market capitalization in January of this year, has experienced certain challenges, including a slowing of sales growth, particularly in iPhones, which fell 10% compared to the same period last year.
The strategic issues surrounding the demand in significant regions such as China, as well as the responses to the company’s new products, such as the Vision Pro virtual reality headset, are also contributing to these challenges.
However, Nvidia has successfully expanded into cloud services and artificial intelligence, resulting in a significant increase in market capitalization.
The company has achieved certain milestones in a relatively short time.
This is also consistent with the current market trends, which are characterized by a greater emphasis on companies that are significant participants in the AI technology sector.
Additionally, Nvidia appears to be on the brink of further expansion, particularly as it prepares for a 10-1 stock split later this month, which could increase the accessibility of its shares to a broader range of investors.
