Los Angeles, California: Nvidia briefly surpassed Apple in market value, seizing the title of the world’s most valuable company. Driven by high demand for its advanced AI chips, Nvidia’s stock market value peaked at $3.53 trillion on Friday, edging out Apple at $3.52 trillion, according to LSEG data.
Historic Stock Rally Boosts Nvidia’s Value
Nvidia’s impressive October rally, with an 18% rise, follows an announcement from OpenAI on securing $6.6 billion in funding. Nvidia supplies the critical AI chips behind OpenAI’s technologies like GPT-4, fueling this demand.
“AI adoption continues to rise, and Nvidia is in a sweet spot,” said Russ Mould, investment director at AJ Bell. “If the U.S. economy remains stable, companies are likely to continue investing heavily in AI, which bodes well for Nvidia.”
Strong Demand for AI Chips Drives Nvidia to New Heights
The company’s stock surged to record highs last week after Taiwan’s TSMC, a key chipmaker, reported a 54% profit jump, boosted by Nvidia’s chip orders for AI use. The upcoming third-quarter report in November, with a forecasted revenue of $32.5 billion, is anticipated as Nvidia’s next big test.
Analysts’ Take on Nvidia’s Market Momentum
Analyst Joseph Moore from Morgan Stanley remains optimistic, noting that Nvidia’s next-gen Blackwell chips are booked out for the next 12 months. However, he warned the recent rally has set high expectations for Nvidia’s earnings.
AI Frenzy and Federal Rate Expectations Propel Stock Market
Alongside Nvidia, other tech giants like Apple and Microsoft have dominated the U.S. stock market, collectively accounting for a fifth of the S&P 500’s value. AI’s promise, combined with favorable Fed policy forecasts, has sent the S&P 500 index soaring to an all-time high.
Will Nvidia’s Growth Sustain?
Nvidia’s stock has climbed almost 190% this year, buoyed by the generative AI boom. Yet, Rick Meckler, partner at Cherry Lane Investments, questioned the long-term sustainability, noting, “The real test will be whether Nvidia’s revenue stream remains as impressive in the long run.”
With high hopes for AI’s transformative potential, Nvidia’s current dominance could mark the beginning of a new era in tech.
