- Nvidia shares surged 6%, reaching a record high and bringing its market value close to $2.8 trillion.
- The company’s stock has risen nearly 13% since forecasting higher-than-expected second-quarter revenue and announcing a stock split.
- Nvidia’s high-performance AI chips drive significant revenue growth, with strong demand from tech giants like Alphabet, Microsoft, and Amazon.
Nvidia shares rallied around 6% to a record high on Tuesday, bringing the AI chipmaker’s market value close to $2.8 trillion. This puts Nvidia roughly $100 billion away from surpassing Apple in market value, marking a potential major reshuffle among Wall Street’s biggest players.
Stock performance and market capitalisation
Nvidia’s stock last traded at $1,128, with an intra-day high of $1,149.39. Apple’s market value stands at $2.9 trillion, making it Wall Street’s second-most valuable company after Microsoft, which has a market value of $3.1 trillion. Nvidia’s shares have surged nearly 13% since its positive second-quarter revenue forecast and announcement of a stock split.
Also read: Stock grow rapidly, prospect of NVIDIA AI market is bright
Also read: DELL introduces AI-capable products, ties deeply with NVIDIA
Analyst insights and valuation
Analysts like Derren Nathan of Hargreaves Lansdown suggest that Nvidia’s growth trajectory justifies its high valuation, currently trading at 36 times its forward profit estimates. This compares to 38 for Advanced Micro Devices and 21 for Intel.
Revenue growth and AI demand
Nvidia’s data centre segment reported a five-fold increase in revenue, driven by strong demand for its high-performance AI chips from major tech companies like Alphabet, Microsoft, and Amazon.com. This surge in demand underscores Nvidia’s pivotal role in the AI boom.
Comparative performance of big tech
While Nvidia’s shares have more than doubled this year, Apple has underperformed other Big Tech companies, falling around 2% due to weak iPhone demand and competition in China. Microsoft overtook Apple as the world’s most valuable company earlier this year, boosted by its AI advancements in cloud services.
Future outlook
Despite Apple’s slower rollout of generative AI compared to rivals like Microsoft and Google, Nvidia continues to capture investor interest with its robust growth prospects in the AI sector. As Dan Coatsworth of AJ Bell notes, Nvidia’s business is thriving with ample opportunities for further growth.
