By Zainab Shafiq 
Chipmaker Nvidia (NVDA.O) has overtaken Apple (AAPL.O) to become the world’s most valuable company following a massive uptrend in its share price fueled by unprecedented demand for its speciality artificial intelligence chips. Nvidia’s market capitalization surged to around $3.53 trillion at Friday’s close, surpassing Apple at $3.52 trillion, according to data from LSEG.
On Friday, shares of the company at Nvidia rose by 2.2 per cent, ensuring that the market value hit $3.52 trillion. Apple’s stock went up by 0.9 per cent to touch a valuation of $3.54 trillion. This year, the race at the top has been keenly contested, as Wall Street continues gaining heights as leaders such as Nvidia, Apple, and Microsoft keep pushing the stock market to new records and sums.
In June, Nvidia briefly emerged as the firm with the highest market valuation for a short period before losing the title to Microsoft and Apple. As things are now, at the close of the trading session today, Microsoft was priced at $3.20 trillion; 1.3% better from the last close, and the rest is history – having competed against each other for supremacy in emerging AI technology markets.
What makes Nvidia the world’s most valuable company?
Nvidia has become one of the leading providers of processors for artificial intelligence computing, leveraging a competitive edge it gets from the tech competition between big players such as Microsoft, Alphabet (GOOGL.O), and Meta Platforms (META.O). Shares in the company jumped about 18% in October partly because of the latest funding round by Open AI at $6.6 billion.
Third-quarter profits at Western Digital (WDC.O) that topped analysts’ estimates also helped perk up investor optimism, showing powerful demand in data centre space. More companies are coming on to integrate AI into their operations, according to Russ Mould, Investment Director at AJ Bell. This is doing to keep strong demand going for Nvidia’s products.
From the comparison this week, it can easily be observed that Nvidia was performing better except for the very slow growth of smartphones. Apple posted the lowest decline rate of 0.3% in the third quarter in China. The key figures forecast include Apple growing its revenue by 5.55% to $94.5 billion and Nvidia to yield a spectacular 82% increase in revenue to $32.9 billion.
Nvidia, Apple, and Microsoft together make waves in tech
The weight of Nvidia, Apple, and Microsoft in the tech sector and the broader U.S. stock market is substantial, making up about 20% of the S&P 500 index’s weight. All these together with optimism related to AI, expected rate cuts by the Federal Reserve, and an overall positive start to the earnings season have put spring in the step of the S&P 500 last week, bringing it all the way to the top.
Plenty of attention has been drawn to Nvidia’s outstanding performance by traders, and its options have featured some of the most active of the last several months. While Nvidia’s stock has risen nearly 190% this year, a series of excellent earnings forecasts driven by a generative AI boom didn’t hurt, either.
However, its sustainability is debatable because some analysts are questioning whether the euphoria is fundamental or on the investor’s side. Rick Meckler of Cherry Lane Investments believes that in the near term, Nvidia will report fantastic numbers.
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