AI chipmaker Nvidia has overtaken tech giant Apple on Wednesday (5 June, 2024) to become the world’s second most valuable company, just behind Microsoft.
Nvidia’s market cap surpassed $3 trillion for the first time, driven by the AI boom.
Nvidia’s shares jumped 5% on Wednesday, boosting its market cap to $3.01 trillion, surpassing Apple’s $2.99 trillion. This makes Nvidia the second most valuable publicly traded company in the US, while Microsoft remains the most valuable at $3.15 trillion.
Image source: Stock Analysis
According to analysts, this isn’t the first time Nvidia has been more valuable than Apple. The last occurrence was two decades ago, in 2002, five years before the first iPhone launch, when both companies were valued under $10 billion.
Nvidia first reached a market capitalization of one trillion dollars in May 2023 and crossed the $2 trillion mark in February this year.
In just nine trading sessions since announcing its quarterly results on May 22, 2024, Nvidia’s stock has surged by 29%.
The company holds an 80% market share in AI chips for data centers, with major cloud providers significantly increasing their spending on these technologies.
For the latest quarter, Nvidia’s GPU sales skyrocketed by 427% year-over-year, exceeding $22 billion and making up nearly 86% of its total revenue.
Additionally, the company announced a 10-for-1 stock split and increased its quarterly dividend by 150%.
In comparison, Apple’s shares have only risen by 5% in 2024 as the company’s growth has slowed in its core markets.
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In its latest earnings declaration, Apple had a decline of 4% in overall sales and a 10% drop in iPhone sales compared to the same quarter last year. The company has been facing challenges with demand in China and mixed reactions to its new virtual reality headset, Vision Pro.
Nvidia’s stock has surged due to the growing use of AI, which has led to a worldwide increase in demand for its chips. The company has declared plans to design a new AI chip every year.
CEO Jensen Huang has described Generative AI as a new industrial revolution, expressing that Nvidia will play a significant role in this transformation.
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