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Nvidia’s market value rose by more than $3 trillion to overtake Apple as the world’s second most valuable company on Wednesday after a year of incredible growth fueled by demand for artificial intelligence chips.
Shares in the U.S. chip designer rose about 5 percent to push its market capitalization ahead of Apple for the first time, ending at $3.01 trillion, slightly ahead of Apple’s $3 trillion, according to Bloomberg data. The iPhone maker lost its spot as the most valuable listed company to Microsoft earlier this year.
Investors have flocked to Nvidia shares as tech groups like Google, Microsoft and Meta spend billions of dollars on its chips, with no sign of their spending slowing down anytime soon.
Nvidia’s data center chips are powering artificial intelligence models that CEO Jensen Huang said will fuel a new “industrial revolution” and transform global business with productivity-enhancing features.
The company delivered another sensational earnings report in May, with sales up 262 percent year-over-year, driven largely by sales of the current generation of “Hopper” chips. It also announced a 10-for-1 stock split to take effect on June 7.
According to Bloomberg data, Nvidia alone has accounted for more than a third of the gains in Wall Street’s benchmark S&P 500 this year, raising fears in some quarters of an unsustainable bubble. The S&P 500 rose 1.2 percent on Wednesday and is 12.3 percent higher for the day.
Still, Nvidia’s earnings beat and repeated forecast upgrades mean the company’s valuation isn’t at an all-time high, measured as a ratio of its historical or expected earnings.
It was valued on Wednesday at around 42 times expected earnings over the next 12 months. That’s about 23 times forward earnings at the start of the year, and well above Apple’s 29 times — though it’s below the peak it hit during the height of the first wave of artificial intelligence euphoria last year.
“The advantage they have is that they are one of the few companies that can actually demonstrate revenue from AI,” said Stuart Kaiser, head of U.S. equity trading strategy at Citigroup. “The taller one [the stock] the further you get into this revenue cycle, the more the risks increase, but so far it looks pretty clean.”
Despite efforts by competitors such as AMD and Intel to take some of Nvidia’s market share, it remains the undisputed leader in the global technology race, offering the most advanced hardware for increasingly demanding AI workloads, as well as software tools for building AI applications.
Huang promised a “one-year rhythm” of new chips and unveiled Nvidia’s “Blackwell” products in March. Huang said they will generate “a lot” of revenue this year – earlier than many analysts had predicted.
And in a surprise move at Taiwan’s Computex conference over the weekend, Huang also teased the next generation of “Rubin” processors, which will start shipping in 2026.
Apple is holding its annual Worldwide Developers Conference on June 10, where CEO Tim Cook is expected to unveil the company’s own plan to integrate generative AI functions into its products.
So far, Apple has been left out of the market hype surrounding generative artificial intelligence, which has boosted the shares of its rivals. Its iPhone sales are also down year-on-year, partly due to resurgent competition in China.
But Cook said he was “bullish” on its AI prospects, and Apple’s shares also rebounded from a slump earlier in the year when it announced a larger-than-expected $110 billion share buyback in May.