Nvidia has surpassed Apple in market capitalization as its dominance in the artificial intelligence (AI) sector continued to fuel interest in the company.
On Wednesday, Nvidia’s market value soared past the $3 trillion milestone to close at $3.019 trillion while Apple’s market cap stood at $2.99 trillion.
This makes Nvidia the second-most valuable public company globally, just behind Microsoft with a market cap of $3.15 trillion.
Nvidia’s rise can be attributed to its critical role in the AI revolution. The chipmaker boasts an estimated 80% market share in AI chips for data centers, sectors which are seeing substantial investment from major cloud vendors.
Since reporting its first-quarter earnings in May, Nvidia shares have surged over 24%, reflecting investors’ confidence in its continued growth and innovation.
For the most recent quarter, Nvidia’s data center business—which includes its Graphics Processing Unit (GPU) sales—reported a staggering 427% revenue increase from the previous year, amounting to $22.6 billion. This segment now represents approximately 86% of the company’s overall sales.
The company’s rapid growth is a testament to the increasing demand for AI infrastructure and the pivotal role Nvidia plays in this expanding market.
In contrast, Apple has experienced more modest gains, with shares up only about 5% this year.
The iPhone maker faces strategic challenges, including fluctuating demand in China, manufacturing issues, and mixed reactions to its new virtual reality headset, Vision Pro.
In its latest quarterly earnings report, Apple announced a 4% decline in overall sales and a 10% drop in iPhone sales compared to the previous year.
Historically, Apple has been a trailblazer in market capitalization milestones, being the first to reach $1 trillion and $2 trillion. However, it was overtaken by Microsoft earlier this year.
Now, Nvidia’s rise signifies a shift in market dynamics, with AI technology driving investor interest and reshaping the competitive landscape.
Founded in 1991, Nvidia initially focused on gaming hardware, particularly for 3D computer games. Over the years, it expanded into other sectors, including cryptocurrency mining and cloud subscription services.
The company’s strategic pivot towards AI has resulted in exponential growth, with shares skyrocketing more than 3,290% over the past five years. In May, Nvidia announced a 10-for-1 stock split, further boosting its stock performance.
As Nvidia continues to innovate and expand its AI capabilities, its position as a market leader is solidified. The company’s ability to adapt and thrive in the rapidly evolving tech landscape has not only propelled its market value past Apple but also set a new benchmark for success in the industry.