Nvidia’s Market Value Soars, Closing in on Apple’s Valuation

Nvidia’s shares surged about 6% on Tuesday, hitting a record high and bringing the AI chipmaker’s market value within $100 billion of overtaking Apple. Nvidia’s market capitalization reached $2.8 trillion, while Apple’s stood at $2.9 trillion, making it Wall Street’s second-most valuable company after Microsoft.

Trading at $1,128, Nvidia’s stock climbed as much as 8% to $1,149.39 during the session, setting an intra-day record high. Meanwhile, Apple’s stock dipped 0.2% in afternoon trading.

Nvidia’s shares have jumped nearly 13% since last week when it forecasted second-quarter revenue above Wall Street expectations and announced a stock split, which has excited investors betting on the AI leader.

“The market has been struggling to keep up with the company’s ever-improving growth trajectory. At a mid-thirties forward earnings multiple, this still doesn’t feel like bubble territory,” said Derren Nathan, head of equity analysis at Hargreaves Lansdown. Nvidia traded at 36 times its forward profit estimates, compared to 38 for Advanced Micro Devices and 21 for Intel, according to LSEG data.

Nvidia’s stock has more than doubled this year after tripling last year. The company, benefiting significantly from the AI boom, reported a five-fold revenue increase in its data center segment last week as customers eagerly seek high-performance chips.

Tech giants like Alphabet, Microsoft, and Amazon.com are competing for Nvidia’s high-end chips to lead in AI computing.

“Business is doing incredibly well, there are so many opportunities to keep growing, and the AI theme still has legs. When the song is that catchy, investors want to keep humming it all day long,” said Dan Coatsworth, investment analyst at AJ Bell, about the stock’s rally.

Apple, long a must-own stock on Wall Street, has underperformed other Big Tech companies recently, falling around 2% this year due to weak iPhone demand and fierce competition in China. Microsoft overtook Apple as the world’s most valuable company earlier this year, propelled by gains from early AI investments in its cloud services. Microsoft’s shares were down 0.4% on Tuesday, giving it a market value of $3.1 trillion.

Apple has been slower than rivals like Microsoft and Google in integrating generative AI into its products, which generate human-like responses to written prompts.