NVIDIA Dethrones Apple: The Rise of a New Tech Giant
Nvidia AI chip. (Photo = Nvidia)
[알파경제=(시카고) 폴 리 특파원] AI is dominant on Wall Street.
Nvidia surpassed Apple on the 5th (local time) to become the world’s largest company.
The stock price rose 2.9% to $139.93, with a market capitalization of $3.43 trillion, surpassing Apple ($3.38 trillion). Microsoft’s market capitalization is $3.6 trillion.
Nvidia has surged more than 850% since the end of 2022.
Apple’s earnings last week highlighted concerns about revenue growth coupled with weakness in China. NVIDIA plans to announce its earnings at the end of this month.
“Nvidia’s overtaking Apple in market capitalization not only indicates that it is the biggest beneficiary of the AI infrastructure cycle, but also signals expectations that the AI boom will continue,” said Paul Ainina, research director at James Investment.
NVIDIA accounts for 7% of the S&P 500 index and is responsible for about a quarter of the benchmark’s 21% increase this year.
Nvidia is not only the largest company by market capitalization, but it also has the best stock performance of the year. Nvidia’s 183% rise is the third largest in the S&P 500 index this year, following power producer Vistra and data analytics software company Palantir Technologies, which have seen a surge in AI-related demand.
Jensen Huang, CEO of NVIDIA. (Photo = Yonhap News)
It has been showing strength recently, calming investor concerns about Blackwell’s chips and its long-term growth prospects, which were delayed due to engineering issues.
Analysts expect Nvidia’s revenue to more than double this fiscal year and rise another 44% in the next fiscal year, according to data compiled by Bloomberg.
Wall Street analysts have consistently revised upward their estimates for Nvidia’s revenue and profits over the past quarters.
Wall Street’s biggest companies are all heavily exposed to AI, including Apple with its newly released AI iPhone, Microsoft, Amazon, and Alphabet, which provide cloud businesses and AI services, and Metaplatform with AI capabilities and ad targeting.
Except for Apple, these companies are all among NVIDIA’s major customers and have emphasized their willingness to continue investing in AI.
Beyond Nvidia’s Blackwell optimism, Taiwanese semiconductor manufacturer TMSC’s recent sales showed strong AI demand, and OpenAI was valued at $157 billion through a funding round. OpenAI also recently released an AI model with inference capabilities, and Alphabet is also working on it.
“These big tech companies are investing hundreds of billions of dollars, and Nvidia is reaping the biggest benefit,” Ainina said.
Alpha Economy Correspondent Paul Lee (hoondork1977@alphabiz.co.kr)
