Nvidia surpassed Apple as the most valuable company in the world after a record-breaking stock rally on Friday, driven by the unquenchable demand for its new supercomputing AI chips. Based on London Stock Exchange Group data, Nvidia's stock market value reached USD 3.53 lakh crore, while Apple's was USD 3.52 lakh crore.
Share performance of Apple & Nvidia
The shares of Nvidia touched a day high level of USD 144.13 per share on the bourses, while apple's stock went on to touch the day high level of USD 233.22 per share on the exchanges. Both Nvidia and Apple shares concluded at USD 141.54 per share and USD 231.41 per share, respectively.
Nvidia's first attempt at becoming most valuable
Nvidia momentarily surpassed Apple and Microsoft as the most valuable companies in the world in June. For several months, the market capitalizations of the tech trio have been in close proximity to one another. Microsoft had a market value of almost USD 3.2 lakh crore.
Since the announcement of a USD 6.6 billion funding round by OpenAI, the company behind ChatGPT, Nvidia's stock has increased by roughly 18 per cent so far in October. Chips from Nvidia are used to train 'foundation models' like OpenAI's GPT-4.
Tech stock's weightage in Index
After TSMC, the largest contract chipmaker in the world, reported a 54 per cent increase in quarterly profit last week, Nvidia's shares surged to a record high on Tuesday.
With Nvidia, Apple, and Microsoft holding roughly a fifth of the weight of the S&P 500 index, their shares have a significant impact on the highly valued technology sector as well as the larger U.S. stock market.
Factors in favour of rally
The benchmark S&P 500 reached an all-time high last week due to a flurry of interest in AI, expectations that the U.S. Federal Reserve will significantly lower interest rates, and, most recently, a positive start to the earnings season.
Since the company released a number of blowout forecasts due to the generative AI boom, the stock has risen by almost 190 per cent so far this year.