Nvidia Overthrows Apple & Becomes The Most Valuable Company

Chicago, November 5, 2024 – In a move that underscores the growing dominance of artificial intelligence (AI) in the global economy, Nvidia has dethroned Apple to become the world’s largest company by market capitalization. The chipmaker’s stock rose 2.9% to US$139.93, pushing its market cap to a staggering US$3.43 trillion (S$4.5 trillion), surpassing Apple’s US$3.38 trillion. This marks Nvidia’s second time reaching the top spot.

Over the past few quarters, it’s like investors only care about three things: inflation, jobs, and Nvidia. Nvidia overtaking Apple signifies not only that it’s the frontrunner in the AI infrastructure race, but it also suggests that the AI boom is here to stay.

Commented Dr. Fall Ainina, Director of Research at James Investment Research

This isn’t Nvidia’s first brush with the top spot. In June 2024, the company briefly held the title of largest company, highlighting its meteoric rise in recent years. Nvidia’s stock price has skyrocketed over 850% since the end of 2022, reflecting investor confidence in its role as a central player in the global AI revolution.

The impact of Nvidia extends beyond its own success. It now holds a significant weight (7%) in the S&P 500 index, contributing heavily to the benchmark’s impressive 21% gain this year. This dominance underscores a broader trend: the biggest companies on Wall Street are all heavily invested in AI.

Apple with its latest AI-powered iPhones, Microsoft, Amazon, and Alphabet with their cloud platforms and AI services, and Meta Platforms with its focus on AI features and targeted advertising – these tech giants are all Nvidia’s major customers, continuously pouring resources into the development and application of AI. While Apple’s recent results sparked concerns about growth and weakness in the Chinese market, all eyes are now on Nvidia’s upcoming earnings report later in November.

The dominance of AI isn’t just reflected in market capitalization; it’s also evident in the year’s top stock performers. Nvidia’s 183% surge ranks third in the S&P 500, falling behind only Vistra Corp (an AI-driven power producer) and Palantir Technologies (a data analysis software company). These trends highlight how deeply intertwined AI has become with the financial landscape.

Recent strength for Nvidia came after resolving investor concerns about the delayed Blackwell chip and long-term growth prospects. Analysts are bullish, with projections suggesting Nvidia’s revenue will more than double in the current fiscal year and continue to climb by 44% the following year. This optimism aligns with the positive signals from other players in the AI ecosystem. Taiwan Semiconductor Manufacturing Company’s recent sales point towards strong AI demand, while the staggering US$157 billion valuation achieved by OpenAI in its recent funding round reinforces investor confidence in AI advancements.

“The implications of AI are vast,” says Dr. Ainina of James Investment Research. “Tech giants are pouring hundreds of billions into this technology, and Nvidia stands to benefit the most. The future for Nvidia, and for the broader AI industry, looks incredibly promising.”

This shift in the business landscape reflects a new era, where AI is not just a buzzword but a driving force behind innovation and economic growth. With Nvidia at the helm, the future of AI promises exciting advancements and potentially disruptive changes to the world as we know it.