Nvidia surpassed Apple as the world’s most valuable company on Friday, driven by an unprecedented surge in demand for its specialized AI chips. Nvidia’s market cap briefly reached $3.53 trillion, narrowly topping Apple’s $3.52 trillion, according to data from LSEG.
By the end of trading, Nvidia had risen 0.8%, with a value of $3.47 trillion, while Apple’s stock gained 0.4%, keeping its valuation at $3.52 trillion. Nvidia had temporarily taken the lead as the top company in June but was later overtaken by Microsoft and Apple, with all three companies remaining close in market valuations. Microsoft’s market cap currently stands at $3.18 trillion, with shares also up 0.8%.
Nvidia, the leading supplier of processors for AI computing, is profiting significantly in the race among tech giants like Microsoft, Alphabet, and Meta to dominate AI technology. Originally known for its gaming processors in the 1990s, Nvidia’s stock has climbed approximately 18% in October, particularly after OpenAI secured $6.6 billion in funding.
Nvidia’s and other chip stocks gained on Friday as Western Digital, a data storage company, posted quarterly earnings that exceeded analyst expectations, reflecting strong data center demand.
“AI adoption is expanding across businesses, and Nvidia’s chips remain in high demand,” noted Russ Mould, investment director at AJ Bell. He emphasized that unless a significant economic downturn hits the U.S., investments in AI will likely continue, providing Nvidia with a favorable growth environment.
Earlier this week, Nvidia’s shares hit a new high, continuing a strong rally spurred by TSMC’s report of a 54% profit increase due to rising AI chip demand.
Meanwhile, Apple faces weaker smartphone demand, with iPhone sales in China slipping 0.3% in the third quarter, as Huawei’s phone sales soared by 42%.
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As Apple prepares to announce its quarterly results on Thursday, analysts expect a 5.55% revenue increase year over year to $94.5 billion, while Nvidia’s revenue is projected to jump nearly 82% to $32.9 billion.
Nvidia, Apple, and Microsoft heavily influence the tech sector and the broader U.S. stock market, collectively representing about one-fifth of the S&P 500 index.
A surge in optimism around AI, coupled with expectations for lowered U.S. interest rates and a strong start to the earnings season, helped the S&P 500 reach a record high last week.
Nvidia’s remarkable gains have made it a popular choice for options traders, and its options are among the most active in recent months, according to Trade Alert.
The stock’s nearly 190% increase this year reflects the AI boom and Nvidia’s string of strong revenue forecasts.
“The question remains whether the revenue will sustain over time, potentially driven more by investor excitement than by tangible results proving the AI trend’s long-term viability,” commented Rick Meckler, partner at Cherry Lane Investments. He added that Nvidia is likely to report impressive numbers in the near term.
