NVIDIA surpasses Apple to become world's most valuable company
06 Nov 2024

NVIDIA has dethroned Apple to become the world's most valuable publicly-traded company.

The AI chipmaker's market cap hit $3.43 trillion on Tuesday, beating Apple's $3.40 trillion valuation.

The jump in value comes primarily due to NVIDIA's stock price nearly tripling this year, fueled by strong demand for its graphics processing units (GPUs) and a strong foothold in the artificial intelligence (AI) space.

NVIDIA's stock performance and AI dominance
Market leadership

NVIDIA's stock has skyrocketed over 2,700% in the last five years. The company's revenue has more than doubled in each of the last five quarters, even tripling in three of them.

This phenomenal financial performance can be attributed to NVIDIA's position as the leading supplier of GPUs, which are essential for building and running advanced AI software such as OpenAI's ChatGPT.

NVIDIA's journey from gaming to AI
Evolution

Founded in 1991 to make chips for 3D games, NVIDIA has become a giant in the AI space.

Over the last decade, scientists and researchers discovered that NVIDIA's chip designs were ideal for the parallel processing needed for AI.

This revelation prompted the company to create more powerful chips and software tailored for AI workloads.

NVIDIA's inclusion in Dow Industrial Average
Market recognition

In a major market recognition, S&P Dow Jones announced last week that NVIDIA will be joining the Dow Industrial Average on Friday.

The tech giant will be replacing its longtime competitor Intel in the prestigious index.

Notably, NVIDIA also makes up 7% of the weight of the S&P 500 Index and has contributed to about a quarter of the benchmark's 21% gain this year.

NVIDIA's growth prospects and AI demand
Future outlook

Analysts expect NVIDIA's revenue to more than double in its current fiscal year and rise by another 44% in the next.

These estimates are based on strong AI demand reflected by recent sales from Taiwan Semiconductor Manufacturing Co. and a funding round for OpenAI that gave it a $157 billion valuation.

"The implication of AI is extraordinarily large, and these big tech companies are investing hundreds of billions into it, with NVIDIA benefiting the most," James Investment's Ainina said.