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Nvidia Surpasses Apple: Second Most Valuable Company

Nvidia has made waves by surpassing Apple in market capitalization, the second-most valuable public company in the U.S.
June 7, 2024

Nvidia has overtaken Apple in market capitalization, marking a significant milestone as investors continue to pour money into the chipmaker at the forefront of the AI revolution. Now the second-most valuable public company, Nvidia trails only behind Microsoft.

On Wednesday, Nvidia's market cap soared past the $3 trillion mark, closing at $3.019 trillion after a more than 5% increase in its stock price. This pushed it ahead of Apple, which ended the day with a market value of $2.99 trillion. Microsoft remains the most valuable company, boasting a market cap of $3.15 trillion.

Nvidia’s shares have surged over 24% since it reported strong first-quarter earnings in May, continuing a bullish trend that began last year. Dominating the AI chip market with an estimated 80% share for data centers, Nvidia is benefiting from massive spending by leading cloud vendors.

Investors are increasingly confident that Nvidia’s explosive growth in sales to major cloud companies will sustain. In the latest quarter, Nvidia’s data center revenue, primarily from its GPU sales, skyrocketed 427% year-over-year to $22.6 billion, accounting for 86% of the company’s total revenue.

In contrast, Apple’s shares have only risen about 5% this year amid slowing sales growth. The tech giant’s latest earnings report revealed a 4% drop in overall sales and a 10% decline in iPhone sales from the previous year. Apple faces strategic challenges, including fluctuating demand in China, manufacturing issues, and mixed reactions to its new virtual reality headset, Vision Pro.

Apple, the first company to reach $1 trillion and $2 trillion market caps, has been surpassed by both Microsoft and now Nvidia. Microsoft, too, has capitalized on the growing demand for AI infrastructure.

Founded in 1991, Nvidia initially focused on gaming, supplying hardware for 3D computer games. It later expanded into cryptocurrency mining chips and cloud subscription services. The company’s stock has seen a meteoric rise, climbing over 3,290% in the past five years, reflecting its successful pivot to AI. Nvidia even announced a 10-for-1 stock split in May to accommodate its rising share price.

As Nvidia continues to ride the AI wave, its new status as the second-most valuable company highlights the transformative potential of artificial intelligence and the shifting dynamics within the tech industry.

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