Nvidia briefly surpassed Apple in market cap on Wednesday during intraday trading, making it the second most valuable U.S. company if it holds until the close. Nvidia also reached the $3 trillion market cap milestone on the same day, with a market value of $3.007 trillion compared to Apple’s $3.005 trillion. This surge in market cap can be attributed to Nvidia’s strong position in the artificial intelligence boom, with an estimated 80% market share in AI chips for data centers.
Since reporting first-quarter earnings in May, Nvidia’s shares have risen over 24% and have been on an upward trajectory since last year. The company’s data center business, which includes GPU sales, saw a significant rise of 427% year-over-year to $22.6 billion in sales, accounting for 86% of its overall revenue. Investors are increasingly confident in Nvidia’s ability to continue its growth in sales to major cloud companies, leading to its impressive market performance.
On the other hand, Apple’s shares have only seen a modest growth of about 5% this year as its sales growth has slowed down in recent months. In its most recent quarterly earnings report, Apple experienced a 4% drop in overall sales and a 10% decline in iPhone sales compared to the previous year. The company is facing strategic challenges related to demand in China, manufacturing issues, and mixed reactions to its new virtual reality headset, Vision Pro.
Apple, which was the first company to reach $1 trillion and $2 trillion market caps, has frequently been the most valuable U.S. company in recent years but was surpassed by Microsoft earlier in the year. Microsoft has also benefited from the investor demand for AI, similar to Nvidia. While Apple faces challenges, Nvidia’s stock has experienced significant volatility. Founded in 1991 as a gaming company, Nvidia has expanded its business to include cryptocurrency mining chips and cloud subscription services.
Nvidia’s stock has surged over the past five years, rising over 3,290% as its AI business has grown. The company announced a 10-1 stock split in May to make its shares more accessible to a wider range of investors. With its strong position in AI and data center chips, as well as its ongoing growth in sales to cloud companies, Nvidia continues to be a key player in the technology industry and is poised for further success in the future.
