Nvidia (NASDAQ:NVDA) experienced a surge in its shares, climbing around 6% to achieve a record high on Tuesday, bringing the AI chipmaker’s market capitalization within approximately $100 billion of overtaking Apple (NASDAQ:AAPL) in a significant reshuffle among Wall Street’s leading players.
Closing at $1,128, Nvidia’s market capitalization reached $2.8 trillion, while Apple, Wall Street’s second-most valuable company after Microsoft (NASDAQ:MSFT), maintained a market value of $2.9 trillion.
During the session, Nvidia’s stock soared by as much as 8% to $1,149.39, marking an intra-day record high, while Apple’s stock saw a slight decline of 0.2% in afternoon trading.
The surge in Nvidia’s shares can be attributed to its forecast of second-quarter revenue exceeding Wall Street expectations, coupled with the announcement of a stock split, which excited investors who continue to show confidence in the AI pioneer.
Derren Nathan, head of equity analysis at Hargreaves Lansdown, remarked, “The market has been struggling to keep up with the company’s ever-improving growth trajectory. At a mid-thirties forward earnings multiple, this still doesn’t feel like bubble territory.”
Nvidia’s shares traded at 36 times its forward profit estimates, compared to 38 for Advanced Micro Devices and 21 for Intel, according to LSEG data.
The company’s shares have more than doubled since the beginning of the year, following a tripling in value last year. Nvidia reported a remarkable five-fold increase in revenue at its data center segment last week, reflecting the strong demand for its high-performance chips.
Leading technology companies like Alphabet, Microsoft, and Amazon.com are vying for a limited supply of Nvidia’s high-end chips as they race to dominate AI computing.
Dan Coatsworth, investment analyst at AJ Bell, commented, “Business is doing incredibly well, there are so many opportunities to keep growing, and the AI theme still has legs. When the song is that catchy, investors want to keep humming it all day long.”
While Apple has long been considered a must-own stock on Wall Street, it has underperformed other Big Tech companies in recent months, facing challenges such as weak iPhone demand and tough competition in China.
Microsoft surpassed Apple as the world’s most valuable company earlier this year, driven by early investments in artificial intelligence across its cloud services.
Apple’s slower rollout of generative AI, compared to rivals like Microsoft and Google, has also impacted its performance. Generative AI enables the generation of human-like responses to written prompts, a feature that competitors are integrating into their products.
Featured Image: Megapixl
