Nvidia Becomes the Most Valuable Company in the World, Surpassing Apple Amid Growing Demand for Artificial Intelligence.
What is Nvidia's secret behind the sudden surge?
Nvidia has surpassed Apple to become the most valuable company in the world, marking a significant shift in the tech landscape driven by the rapid growth of artificial intelligence. On Tuesday, Nvidia's market capitalization increased by almost 3 percent, closing at $3.43 trillion, surpassing Apple's $3.4 trillion. Nvidia's shares, which have nearly tripled in value this year, finished the day at $139.91, although they experienced a slight decline in after-hours trading.
In 2023, Nvidia demonstrated remarkable growth, becoming the leading supplier of GPUs for AI-powered computers. This resulted in a doubling of its revenue in each of the last five quarters. Nvidia is the leading provider of GPUs, essential for the development and execution of advanced AI software, such as OpenAI's ChatGPT. Over the past five years, its shares have increased by more than 2,700%. Thus, Nvidia joined the exclusive club of companies with a market capitalization of $3 trillion, briefly surpassing Apple.
Fall Ainina, director of research at James Investment Research, noted that "in recent quarters, it seems that attention has primarily been on inflation data, employment figures, and Nvidia's performance." He commented that surpassing Apple in market capitalization not only highlights Nvidia's position as the primary beneficiary of the AI infrastructure boom but also indicates that investors expect growth in AI to continue.
On its part, Apple, which was the first company to reach market capitalizations of $1 trillion and $2 trillion, is looking to define its role in the AI boom while Nvidia leads GPU production. Apple's shares have risen by more than 20 percent this year, and it recently launched Apple Intelligence on iPhones, promising a more private and useful AI experience. However, the company has faced challenges with a slow AI rollout and has secured fewer AI chips compared to some of its larger competitors.
Founded in 1991 to create chips for 3D gaming, Nvidia has excelled in recent years for completely different reasons. Over the last decade, scientists and researchers realized that Nvidia's chip designs, originally conceived for rendering graphics, were ideal for the parallel processing required by AI. In response, Nvidia developed specialized software and more powerful chips designed for AI applications.