Written by Noel Landewicz and Sruti Shankar
(Reuters) – Nvidia on Friday dethroned Apple as the world’s most valuable company following a record rise in its stock price, driven by insatiable demand for new supercomputing AI chips.
According to LSEG data, Nvidia’s stock market value at one point reached $3.53 trillion, while Apple’s stock market value was $3.52 trillion.
In June, Nvidia briefly became the world’s most valuable company, but has since been overtaken by Microsoft and Apple. The tech trio’s market capitalization has been closely contested in recent months. Microsoft’s market capitalization was $3.2 trillion.
NVIDIA stock is up about 18% so far in October after ChatGPT company OpenAI announced a $6.6 billion funding round. Nvidia supplies chips used to train so-called foundational models, such as OpenAI’s GPT-4.
“Demand for Nvidia chips remains strong as more companies now incorporate artificial intelligence into their daily operations,” said Russ Mould, investment director at AJ Bell.
“It’s certainly in the sweet spot, and there’s a feeling that as long as we avoid a major U.S. recession, companies will continue to invest heavily in AI capabilities, creating a healthy tailwind for NVIDIA.”
Nvidia stock hit a record high on Tuesday, building on gains from last week when TSMC, the world’s largest contract chipmaker, posted a better-than-expected 54% quarterly profit growth as demand for AI chips soared. Ta.
The next big test will be when NVIDIA releases its third quarter results in November. According to data compiled by LSEG, NVIDIA in August expected third-quarter sales of $32.5 billion (plus or minus 2%), compared to the current average analyst forecast of $32.9 billion. It has become.
Morgan Stanley analyst Joseph Moore said in an Oct. 10 note that he remains “very bullish” on the company’s long-term prospects, but that recent stock gains “raise the earnings bar somewhat. ” he said.
After a meeting with Nvidia CEO Jensen Huang, Moore said production ramp-up for next-generation Blackwell chips appears to be “very strong,” with 12 months’ worth of reservations in place. Shares came under pressure in August after Nvidia confirmed reports that production of Blackwell chips had been delayed until the fourth quarter.
Nvidia, Apple, and Microsoft’s stocks have significant influence not only on the overall U.S. stock market, but also on the highly valued technology sector, with the three companies accounting for about one-fifth of the S&P 500’s weight. occupied.
