AI chipmaker Nvidia overtakes Apple as value surpasses three trillion dollars

6 June 2024, 08:14

Nvidia overtakes Apple. Picture: PA

Nvidia’s surge in market value to leapfrog Apple marks another milestone in the tech sector amid a frenzy around artificial intelligence.

Nvidia has overtaken tech giant Apple as the world’s second most valuable company after the AI chipmaker saw its stock rally above the three trillion US dollar (£2.34 trillion) mark for the first time.

Nvidia’s record shares helped Wall Street also leap to an all-time high overnight amid the frenzy around artificial intelligence.

The firm’s surge in market value to leapfrog Apple marks another milestone in the tech sector, with Apple previously having dominated since it launched its iPhone in 2007.

Apple lost its crown as the world’s most valuable publicly listed company to Microsoft earlier this year amid worries over iPhone demand and thanks to Microsoft’s investment in ChatGPT-maker OpenAI as it took an early lead in generative AI.

Nvidia has now joined Microsoft and Apple as the only US stocks ever to top three trillion dollars in total value.

After share rises across the sector overnight, Microsoft is worth 3.15 trillion US dollars (£2.46 trillion), with Nvidia at 3.012 trillion US dollars (£2.35 trillion) and Apple at 3.003 trillion US dollars (£2.34 trillion).

Nvidia’s chips are powering much of the rush into AI, which has seen it become a poster child of the AI boom, with demand for its processors from the likes of Google, Microsoft and Facebook owner Meta outstripping supply.

Nvidia’s shares – up nearly 150% now so far this year – are also being boosted by an upcoming move to split its stock by 10-to-one on Friday.

Dan Coatsworth, investment analyst at AJ Bell, said the stock split will “bring its share price down and make it more affordable to investors who cannot afford to splash out more than a grand per share, as well as to benefit employees who use some of their monthly pay packet to invest in the company”.

Nvidia’s all-time stock market highs came amid a wider rally on Wall Street, with the S&P 500 finishing the session 1.2% higher to top its all-time high set two weeks ago and the Nasdaq composite jumping even more, 2%, and likewise setting a record.

The Dow Jones Industrial Average, which has less of an emphasis on tech, lagged the market with a gain of 96 points, or 0.3%.

Some bigger-than-expected profit reports from tech companies helped drive the market.

Hewlett Packard Enterprise jumped 10.7% after saying strong sales related to AI systems helped it deliver better results than expected, while it also raised its financial forecasts for the year.

Companies have so far been meeting Wall Street’s hopes for how much money the new tech will generate, which has helped to send stocks soaring – almost regardless of the broader US economic backdrop and what interest rates are doing.

By Press Association

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