Nvidia Corp. was already the world’s most valuable semiconductor company. It is now the first computer chip company to reach a market capitalization of $3 trillion.
Shares of the Santa Clara, California-based company have risen about 147% this year, adding about $1.8 trillion as demand for chips used to power artificial intelligence tasks surges. On Wednesday, shares rose 5.2% to close at a record $1,224.40, pushing its market value to more than $3 trillion and surpassing Apple Inc. in the process.
The last time Nvidia was worth more than Apple was in 2002, five years before the iPhone was released. At the time, both companies were each valued at less than $10 billion.
Nvidia has shown no signs of slowing down or allowing competitors to catch up. The company’s CEO, Jensen Huang, said the company plans to upgrade its so-called AI accelerators every year. Wednesday’s stock rally boosted his wealth by more than $5 billion to $107.4 billion, according to the Bloomberg Billionaires Index.
The rise of generative AI is a new industrial revolution, and Nvidia expects to play a key role as the technology transitions to personal computers, Huang told attendees during a keynote address at National Taiwan University.
“We’re seeing these big swings, like in the very early innings,” said Angelo Zino, senior equity analyst at CFRA Research.
After the CEO’s keynote, Zino said he liked the “improved visibility” and that “greater momentum on the GPU/CPU/networking side will push the consensus estimates upward.”
The company has been one of the biggest beneficiaries of the massive flood of AI spending, helping put it in the race for the title of the world’s most valuable company. The chipmaker still trails Microsoft Corp. in terms of market value, but with its stock price plummeting, Wall Street believes it’s only a matter of time before Nvidia catches up.
Apple has struggled this year as the tech giant’s shares have fallen amid concerns about falling demand for iPhones in China and fines from the European Union. With investor sentiment toward the iPhone maker slowly improving, the company’s stock price recently turned positive for 2024.
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