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Nvidia Becomes Second Most Valuable Company in the US, Overtaking Apple in Market Capitalisation

Nvidia Becomes Second Most Valuable Company in the US, Overtaking Apple in Market Capitalisation

Nvidia overtook Apple in terms of market capitalisation on Wednesday 05/06, with investors continuing to bet on the chipmaker at the root of the artificial intelligence boom. It is now the second most valuable publicly traded company, behind Microsoft.

Nvidia also reached a market capitalisation milestone of $3 billion on Wednesday, after shares rose by more than 5%. At the close of the market, Nvidia had a market value of 3.019 billion dollars, compared to Apple’s 2.99 billion dollars. Microsoft is the most valuable publicly traded company, with a market value of 3.15 billion dollars on Wednesday.

Nvidia’s shares have risen by more than 24 per cent since the company released its first quarter earnings in May and have been on the rise since last year. The company has an estimated 80% market share in AI chips for data centres, which are attracting billions of dollars in spending from large cloud providers.

Investors are also becoming more comfortable with the fact that Nvidia’s huge growth in sales to a handful of cloud computing companies could persist. In the most recent quarter, revenues from its data centre business, which includes GPU sales, rose 427% year-on-year to 22.6 billion dollars, around 86% of the company’s global sales.

Meanwhile, Apple’s shares have only risen by around 5 per cent this year, as the iPhone maker’s sales growth has stagnated in recent months. In its most recent quarterly results report, Apple said that global sales fell by 4 per cent and iPhone sales fell by 10 per cent compared to the same period last year. Apple is facing strategic issues and problems related to demand in China, manufacturing and mixed reactions to its new virtual reality headset, Vision Pro.

Apple was the first company to reach a market capitalisation of 1 and 2 trillion dollars. It had long held the title of most valuable company in the US, but was overtaken by Microsoft earlier this year. Microsoft has also benefited from investor demand for AI infrastructures.

Nvidia has been more volatile as a stock than Apple. Founded in 1991, the company’s main focus was gaming, selling hardware to play 3D computer games. More recently, it has sold cryptocurrency mining chips and cloud subscription services.

Nvidia’s shares have soared as its AI business has developed, increasing by more than 3,290 per cent over the last five years. The company announced a 10-for-1 stock split in May.

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