Nvidia’s valuation temporarily reached $3.53 trillion, narrowly surpassing Apple’s $3.52 trillion, before closing the day at $3.47 trillion, while Apple ended at $3.52 trillion.

The Silicon Valley-based chip giant has become a central company in the AI sector, with Nvidia’s specialised chips proving essential for AI-driven applications across sectors.

The company’s stock has surged, boosted by a recent $6.6 billion investment in OpenAI, the developer of AI models like ChatGPT, which rely heavily on Nvidia’s GPUs for training. 

Nvidia’s October rally has increased its stock by 18%, further bolstered by favourable earnings from other tech firms like Western Digital, which saw a boost from strong data centre demand.

Chipmaker Nvidia Surges Past Amazon, Alphabet to Become Fourth Most Valuable Company

While Apple has maintained a steady climb with a 0.4% rise in its share price, Nvidia’s rise comes from the wider AI adoption. 

AI technology is penetrating various industries and Nvidia’s chips are increasingly in demand, placing the company at the top of AI infrastructure. A promising earnings season, alongside expectations of potential interest rate cuts from the Federal Reserve, has pushed the S&P 500 index to all-time highs, with Nvidia, Apple, and Microsoft comprising nearly 20% of the index’s weight.

Tuesday saw Nvidia’s shares reach record highs, driven by TSMC’s strong quarterly results and a forecast-beating 54% profit increase, largely attributed to the soaring need for AI chips. Investors and analysts are now waiting to see Nvidia’s third-quarter performance, with the company projecting revenue at around $32.5 billion. 

Nvidia CEO Jensen Huang recently pointed out the high demand for the company’s upcoming Blackwell chips, though supply chain challenges have delayed production.

With a 190% rise, Nvidia’s increase in its share value this year, Nvidia has drawn interest from options traders. However, some investors are cautious about whether the AI-driven revenue surge is sustainable. 

Founded in 1993, Nvidia initially made its mark in graphics processing for video games before evolving into a leader in accelerated computing.

With Apple preparing to release its quarterly earnings with a projected 5.55% revenue growth to $94.5 billion, Nvidia’s 82% revenue growth expectation reiterates the market impact of the AI boom.

In contrast, Apple has faced tepid iPhone demand, with sales declining by 0.3% in China, while Huawei posted a 42% surge in sales.

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Shares of the chipmaker climbed 3.2% to $135.21, lifting its market capitalization to $3.326 trillion, just days after overtaking iPhone maker Apple to become the second most valuable company.

The stock has surged about 173% so far this year, compared with a rise of about 19% in Microsoft shares, with demand for its top-of-the-line processors outpacing supply.

Tech giants Microsoft, Meta Platforms and Google-owner Alphabet are racing to build out their AI computing capabilities and dominate the emerging technology.

The surge in shares pushed the stock to a record high, adding over $103 billion to Nvidia’s market capitalization on Tuesday.

Increasing the appeal for its highly valued stock among individual investors, Nvidia recently split its stock ten-for-one, effective June 7.

“A stock split can reduce the price per share, making it more affordable for individual investors to buy. With Nvidia doing a 10:1 stock split, retail investors are the real winners here,” said Sam North, market analyst at investment platform eToro.

The company’s market value expanded from $1 trillion to $2 trillion in just nine months in February, while taking just over three months to hit $3 trillion in June.

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