Artificial intelligence chipmaker Nvidia has overtaken Apple to become the world’s second-most valuable company as demand for its shares surges, raising the company’s market capitalization to $3.012 trillion.
Nvidia shares surged by 5.2 percent, closing at $1,224.40. Meanwhile, Microsoft, the world’s most valuable company, rose 1.91 percent to a market capitalization of $3.15 trillion, while Apple gained 0.78 percent, raising the company’s market capitalization to $3.003 trillion.
Annual performance
Unlike other tech giants in the field, Nvidia is profiting from the surge in AI use while others like Microsoft and Meta are spending on AI.
Nvidia’s stock has surged 147 percent so far this year, with demand for its AI chips significantly outweighing the company’s supply as companies race to build their AI capabilities in a bid to dominate the emerging scene.
Since May 22 only, the company’s shares have rallied nearly 30 percent after it released its outstanding revenue forecasts. On Wednesday alone, the company added close to $150 million in market capitalization.
Nvidia is preparing to split its stock 10-for-1, effective June 7, a move that could increase its appeal and accessibility to individual investors and employees.
Read | Worldwide AI chips revenue to grow 33 percent to $71 billion in 2024: Report
Competitors struggle
While Nvidia capitalizes on the wave of AI enthusiasm on Wall Street, Apple is struggling with weak demand for its phones and tough competition in China, the world’s biggest smartphone market. Apple’s stocks have risen only about 5 percent so far this year, significantly lower than the S&P 500 index and tech Nasdaq indices.
Analyst projections for the AI chipmaker’s future earnings have outpaced its remarkable stock gains. Hence, the company’s stocks are trading at 39 times expected earnings, making it less expensive compared to a year ago when it traded over 70 times expected earnings, according to the latest LSEG data.
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