Nvidia Dethrones Apple as Most Valuable Company in World

By: Epoch Times - Business Posted On: November 06, 2024 View: 0

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The corporation’s stock has grown by more than 2,500 percent in the past five years.

Nvidia surpassed Apple to become the most valuable company, with demand for its artificial intelligence (AI) chips fuelling the surge in its stock price.

Nvidia shares rose by 2.84 percent on Tuesday, to close at $139.91, taking the company’s market capitalization to $3.43 trillion—higher than Apple’s market cap, which by the end of Nov. 5, was at $3.38 trillion.

Nvidia had earlier briefly dethroned Apple on Oct. 25. The graphics chip manufacturer also has higher trading volumes. On Tuesday, the corporation’s average trading volume was 248 million, around six times more than Apple’s 41 million, signifying high investor interest.

On a year-to-date basis, Nvidia is up by more than 190 percent, a far bigger rate of return compared to Apple’s 20 percent gain. Nvidia came into significant prominence following the demand for its AI chips. The company’s shares have risen by more than 900 percent in the past two years and more than 2,500 percent since 2019.

In the second quarter of fiscal 2025, the corporation reported a revenue of more than $30 billion, up 122 percent from 2024. Net income was up 168 percent during this period.

“Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI,” said Jensen Huang, founder and CEO of the company.

For the third quarter, the company is expecting revenues to grow to $32.5 billion. Third quarter results are scheduled to be released on Nov. 20.

Nvidia will also be listed in the Dow Jones index beginning Nov. 8, following the company’s stellar performance and growing stature. S&P said in a statement that the decision was taken to “ensure a more representative exposure to the semiconductors.”

A Sept. 7 report by Morgan Stanley predicts Nvidia to expand even more. The investment bank has set a base target of $630 for Nvidia’s shares, over four times the current price level. The bull-case scenario predicts prices to hit $800.

Morgan Stanley pointed out downside risks in the report, such as the company making significant investments in new but unproven opportunities, the PC market remaining sluggish, competition from AMD in the graphics processing unit (GPU) space, and cloud computers shifting to competitive custom hardware.

Antitrust Allegations

Nvidia’s strong position in the AI sector has attracted scrutiny from lawmakers. In September, Sen. Elizabeth Warren (D-Mass.), for example, sent a letter to the assistant attorney general in the Antitrust Division of the U.S. Department of Justice (DOJ) following reports the agency has opened an antitrust probe into the company.

She welcomed the investigation, noting that Nvidia has been a “prime beneficiary” of the AI frenzy, with tech giants such as Microsoft, Meta, and Amazon pouring significant amounts of money into Nvidia chips.

As a consequence of this spending, Nvidia now controls an estimated 90 percent of the high-end AI chip market, the senator said, adding that the corporation also controls 98 percent of the data center GPU market.

Back in 2021, the U.S. Federal Trade Commission (FTC) sued to block Nvidia’s attempt to acquire UK chip design provider Arm Ltd. for $40 billion. The FTC pointed out that the merger would have harmed competition in key tech markets like cloud computing central processing units (CPUs) and processors for passenger cars.

Allowing the deal to go through would have given Nvidia access to sensitive information about Arm’s licensees, some of whom were Nvidia’s rivals, the agency noted. The company eventually backed away from the deal in 2022.

Meanwhile, Nvidia is expanding its capacity. In October last year, the company said it was working with Taiwanese electronics manufacturer Foxconn to develop a new class of data centers.

These facilities would power a wide range of applications like manufacturing and inspection workflows, development of AI-powered electric vehicles, and robotics platforms.

In March, Nvidia announced the launch of its Blackwell platform, which it said would enable organizations to build and run “real-time generative AI on trillion-parameter large language models at up to 25 times less cost and energy consumption than its predecessor.”

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