By overtaking IT behemoth Apple Inc. in market value, chip giant Nvidia has accomplished a remarkable achievement and established itself as the second most valuable publicly traded business in the United States.
Historical Context
This is not the first time that Nvidia’s valuation has surpassed Apple’s. The fact that this is the last example—from 2002—demonstrates Nvidia’s sustained growth trend.
Market Milestones
- On Wednesday, Nvidia’s market value surpassed $3 trillion, surpassing Apple’s $2.99 trillion, as its shares surged 5% to hit $3.01 trillion.
- Remarkably, Nvidia had earlier broken beyond the $1 trillion barrier in May 2023 and then soared to $2 trillion in February of this year.
Market Performance and Growth Drivers
- In just nine trading sessions after the company’s quarterly results were released on May 22, Nvidia’s shares saw an astounding 29% increase.
- Due to its 80% market share in AI chips for data centres, the company has drawn significant investments from major cloud providers.
- Nvidia revealed in the most recent quarter that its GPU sales had increased by an astounding 427% year over year to surpass $22 billion, or roughly 86% of its overall revenue.
- Nvidia announced a 10-for-1 stock split and a noteworthy 150% increase in its quarterly payout to further strengthen investor confidence.
Comparison with Apple
On the other hand, Apple’s stock has increased by a meagre 5% in 2024, which is indicative of its main markets’ stagnating growth.
- In its most recent earnings report, Apple revealed a 4% decrease in overall sales, with a dramatic 10% loss in iPhone sales.
- The lower performance of Apple might be attributed to challenges in the Chinese market demand as well as mixed assessments of its new virtual reality headset, called Vision Pro.
Industry Dynamics
- Microsoft has surpassed Apple, which was previously leading the industry in valuation, which further solidifies Nvidia’s path to market dominance. With its stock closing the night 5.2% higher at $1,224.40, Nvidia is in a strong position to rival Microsoft for the title of most valuable corporation.
Results
Nvidia’s rise to the position of second most valuable publicly traded business highlights its unmatched expansion and innovation in the semiconductor sector. Nvidia is still a powerful force influencing the direction of the tech industry as it outperforms rivals and takes use of cutting-edge technologies.
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