AI Boom Helps Nvidia Reclaim Crown as World’s Most Valuable Company

Nvidia has once again surpassed Apple to become the world’s most valuable publicly traded company, driven by the continued surge in artificial intelligence technology. The semiconductor giant’s shares rose 2.84% on Tuesday, pushing its market capitalization to $3.43 trillion, ahead of Apple’s $3.38 trillion and Microsoft’s $3.06 trillion.

The milestone marks another chapter in Nvidia’s remarkable ascent, with its stock price nearly tripling in 2024 alone. The company’s shares have seen an impressive 190% year-to-date gain and are currently trading at $139.91. Even more striking is the company’s astronomical 850% growth since late 2022, highlighting the market’s strong belief in AI’s future.

This isn’t the first time Nvidia has claimed the top spot – it briefly held the position in June, though only for a day. The latest surge comes as traditional tech giants face headwinds. Apple has struggled to recover from a late October slump following weaker-than-expected sales outlook and disappointing fiscal Q4 earnings. Similarly, Microsoft has yet to bounce back from one of its worst trading days in two years after reducing its guidance for the fourth quarter of 2024.

Nvidia’s success is largely attributed to its dominant position in producing computer chips and graphics processing units crucial for AI applications. The company has established itself as a foundational piece of the world’s top large language models, though competition looms on the horizon. Reports from Reuters indicate that ChatGPT-maker OpenAI has been collaborating with Broadcom to develop its own proprietary systems.

The AI industry’s growth prospects appear robust, with asset manager UBS projecting AI revenue to reach $420 billion by 2027, representing a compound annual growth rate of 72%. In a January note to investors, UBS researchers likened ChatGPT’s impact to an “iPhone moment” for the AI industry, predicting that AI will “remain the key theme driving global tech stocks again in 2024 and the rest of the decade.”

The firm particularly emphasized the expected surge in infrastructure spending, driven by emerging trends in GPU cloud and AI edge-computing, along with broadening AI demand and rising monetization trends.

While Nvidia continues to dominate the AI hardware space, traditional tech giants aren’t standing still. Apple recently launched its own small model generative AI offering, Apple Intelligence, signaling increased competition in the AI sector. However, Nvidia’s continued investment in accelerated computing and generative AI has so far helped maintain its market leadership position.