Nvidia's stocks soared to new heights on Wednesday, propelling the artificial intelligence chipmaker's valuation beyond the $3 trillion mark. This remarkable surge propelled Nvidia past Apple, making it the world's second-most valuable company.
The tech giant is also gearing up for a ten-for-one stock split set for June 7, a strategic move aimed at making its shares more attractive to individual investors.
With Nvidia's market value now at $3.012 trillion, it has edged out Apple, which stands at a valuation of $3.003 trillion after its stock climbed 0.8 percent. Meanwhile, Microsoft remains the world's most valuable company, boasting a market cap of $3.15 trillion following a 1.9 percent increase in its shares.
Jake Dollarhide, CEO of Longbow Asset Management, commented, \"Nvidia is making money on AI right now, and companies like Apple and Meta are spending on AI. It may be a foregone conclusion that Nvidia will overtake Microsoft as well. There's a lot of retail money that's piling in on what they see as a straight shot up.\"
In 2024 alone, Nvidia's stock has surged an impressive 147 percent. The demand for its cutting-edge processors is outpacing supply as major players like Microsoft, Meta Platforms, and Alphabet race to enhance their AI computing capabilities and lead the charge in emerging technologies.
While Nvidia rides the wave of AI enthusiasm on Wall Street, Apple is facing challenges with weaker iPhone demand and stiff competition in China, the world's largest smartphone market. Additionally, some investors believe Apple is falling behind other tech giants in integrating AI features into their products and services.
Analysts are optimistic about Nvidia's future earnings, which have outpaced its stellar stock performance. Currently, Nvidia is trading at 39 times expected earnings, making it more affordable compared to last year when it was valued at over 70 times expected earnings, according to LSEG data.
