Nvidia Approaches Record Market Value, Threatens to Dethrone Apple

On Monday, shares of Nvidia (NVDA.O) reached an all-time high, positioning the leading AI chipmaker to potentially replace Apple (AAPL.O) as the most valuable company in the world.

With investor confidence in the surge of demand for Nvidia's existing and upcoming AI processors, the company, based in Santa Clara, California, saw its stock price increase by 2.4 percent, closing at $138.07.

This growth follows a brief period in June when Nvidia was the most valuable company globally, before being surpassed by Microsoft. The market valuations of these tech giants have closely trailed one another in recent months.

Thanks to the latest gains, Nvidia's market capitalization rose to $3.39 trillion, just shy of Apple's $3.52 trillion and surpassing Microsoft's $3.12 trillion.

Nvidia has emerged as a key player on Wall Street amid a competitive race among tech firms like Alphabet (GOOGL.O), Microsoft, and Amazon (AMZN.O) to lead the charge in AI technology.

According to TD Cowen analysts, the leading companies in AI operations are navigating a complex investment landscape. They noted that firms are under pressure to invest in better technology, as the fallout from not doing so could be severely damaging.

TD Cowen has set a price target of $165 for Nvidia, labeling it a “Top Pick,” and confirmed that demand for its current AI chips remains robust.

In August, Nvidia acknowledged delays in ramping up production of its upcoming Blackwell chips until the fourth quarter of this year but reassured investors that demand for their existing products was strong.

As the market anticipates the upcoming quarterly earnings reports, Apple saw a nearly 2 percent increase in stock value, while Microsoft gained 0.7 percent. This activity contributed to a 0.8 percent rise in the S&P 500 (.SPX), bringing it to a new record close.

The collective influence of Nvidia, Apple, and Microsoft accounts for about 20 percent of the S&P 500's overall value, significantly impacting the index’s daily fluctuations.

Additionally, Taiwan Semiconductor Manufacturing Co (2330.TW), the contract manufacturer responsible for producing Nvidia’s processors, is expected to report a 40 percent increase in quarterly profit, driven by the rising demand for chips.

Analysts predict that Nvidia's annual revenue could more than double to nearly $126 billion, largely supported by investments in AI data centers.

While Nvidia's soaring stock prices support the S&P 500's all-time highs, there are growing concerns that current optimism surrounding AI investments may diminish if signs of a slowdown in spending on related technology begin to surface.

Nvidia, Apple, Stocks