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Nvidia surpasses Apple to become world’s largest company in AI era

Nvidia's rise to the top is largely attributed to the rapid growth in demand for AI and machine learning technologies, which rely heavily on high-performance computing and data processing capabilities

PGurus Newsdesk

November 6, 2024

Nvidia surpasses Apple to become world's largest company in AI era

Nvidia dethrones Apple with $3.43 trillion valuation

In a historic milestone, Nvidia has surpassed Apple to become the world’s largest company by market capitalization, marking a significant moment in the booming artificial intelligence (AI) sector. As of the close of the market on Tuesday, Nvidia was valued at $3.43 trillion, surpassing Apple’s market cap of $3.38 trillion.

Led by CEO Jensen Huang, Nvidia’s ascent to the top spot underscores the growing dominance of AI technologies, with the chipmaker at the heart of the AI revolution. Nvidia’s market value was bolstered by a 2.9% rise in its stock price, which closed at $139.93 per share. This surge in stock price pushed Nvidia’s market capitalization past $3 trillion for the first time and now represents about 7% of the total weight of the S&P 500 Index.

Nvidia’s rise to the top is largely attributed to the rapid growth in demand for AI and machine learning technologies, which rely heavily on high-performance computing and data processing capabilities. The company’s stock first surpassed Apple’s market cap in June, albeit briefly. This time, however, Nvidia has firmly taken the lead, benefitting from its strong foothold in the AI accelerator market, which powers AI-driven advancements in data centers, cloud computing, and generative AI technologies.

In the company’s second-quarter earnings report for the fiscal year, which ended July 28, Nvidia reported a staggering 122% year-over-year increase in revenue, totaling $30 billion. This performance marked a 15% quarter-over-quarter growth, reflecting the rapidly growing demand for Nvidia’s cutting-edge graphics processing units (GPUs) and AI accelerators.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible,” said Jensen Huang, Nvidia’s founder and CEO, referring to the company’s upcoming GPU architecture, which is expected to further fuel the AI boom. “Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

Nvidia’s financial health is also reflected in its commitment to rewarding shareholders. The company returned $15.4 billion to shareholders in the first half of fiscal 2025 through share repurchases and cash dividends. As of the end of the second quarter, Nvidia still had $7.5 billion remaining under its share repurchase authorization.

Looking ahead, Nvidia’s outlook for the third quarter of fiscal 2025 is equally promising, with revenue projections of $32.5 billion (+/- 2%), further cementing its position at the cutting edge of AI innovation. The company will provide detailed commentary on its third-quarter results during a scheduled conference call on November 20.

The incredible demand for AI computing is driving Nvidia to accelerate the development of next-generation technologies. Huang recently made a significant request to SK hynix, the South Korean semiconductor giant, urging them to deliver next-generation high-bandwidth memory (HBM) — a critical component for Nvidia’s AI chips — six months ahead of schedule to meet soaring demand.

Nvidia’s AI accelerators heavily rely on HBM chips to handle the data-intensive tasks required by cutting-edge AI models, which are pushing beyond traditional text-based applications. The company’s ability to quickly adapt and scale its production capabilities has been a key factor in its dominance within the AI space.

While Apple has long been a leader in technology, particularly in consumer electronics, Nvidia’s rise signals a shifting paradigm where AI-driven innovations are taking center stage in global markets. Apple’s focus remains on hardware and software integration for consumer devices, while Nvidia is at the forefront of powering the infrastructure that drives next-generation computing and AI applications.

Currently, Microsoft is the third-largest company by market cap, valued at $3.06 trillion, and also plays a significant role in AI, particularly with its cloud computing and enterprise AI offerings. However, Nvidia’s unparalleled position in AI hardware and software, particularly for data centers and cloud computing, places it in a unique leadership role for the AI-powered future.

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