Nvidia’s market capitalization exceeds $3 trillion thanks to AI

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Nvidia’s market value surpassed $3 trillion to briefly overtake Apple on Wednesday to become the world’s second most valuable company, after a year of incredible growth fueled by demand for intellectual chips artificial.

The American chip designer took the lead Apple first before paring the gains slightly before the close of trading. The iPhone maker lost its position as the most valuable listed company to Microsoft earlier this year.

Investors have flocked in by Nvidia stock as tech giants like Google, Microsoft and Meta spend billions of dollars on their chips with no signs of their spending slowing down in the near future.

Nvidia’s data center chips support the AI ​​models that executives Jensen Huang has vowed to drive a new “industrial revolution,” transforming global business with productivity-enhancing features.

The company delivered another one blockbuster reported earnings in May, with revenue up 262% year-over-year, largely thanks to sales of current-generation “Hopper” chips. It also announced a 10-for-1 stock split, effective June 7.

Nvidia has single-handedly driven more than a third of this year’s gain in Wall Street’s benchmark S&P 500 index, according to Bloomberg data, raising concerns about an unsustainable bubble in some regions.

On Wednesday, it was valued at about 42 times expected earnings over the next 12 months. That’s up from about 23 times forecast earnings at the start of the year and much higher than Apple’s 29 times – though it’s lower than the peak it hit at the height of its mania. The first AI chalk last year.

Despite moves by rivals such as AMD and Intel to take some of Nvidia’s market share, Nvidia remains the undisputed leader in the global technology race to provide the most advanced hardware to the block. The demand for AI work is increasing, as are the software tools to build AI applications.

Huang promised a “one-year cadence” of new chips and the unveiling of Nvidia’s “Blackwell” products in March. Huang said they will generate “a lot” of revenue this year – much sooner analyst predicts.

And in a surprise move at Taiwan’s Computerex conference over the weekend, Huang also provocative The next generation of “Rubin” processors, will begin shipping in 2026.

Apple will host its annual Worldwide Developers Conference on June 10, where chief executive Tim Cook is expected to lay out the company’s own plans for integrating general AI features. into its products.

Apple has so far been left out of the market hype around innovative AI that has boosted the shares of its rivals. Its iPhone sales also fell year-on-year, partly due to increased competition in China.

However, Cook said he was optimistic about the company’s prospects in AI and Apple’s shares have also recovered from a decline at the beginning of the year, with the announcement of a massive $110 billion stock buyback. than expected in May.

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