Finance
Nvidia stock surpasses $3 trillion market cap and overtakes Apple as second-largest company. on the American market
Shares of Nvidia (NVDA) rose as much as 5% on Wednesday to hit an all-time high, giving the company a market cap of more than $3 trillion and making it the third stock to reach this milestone, joining Apple (AAPL) and Microsoft ( MSFT).
During Wednesday’s rally, the company also briefly overtook Apple as the second most valuable company on the U.S. stock market. Microsoft currently holds the top spot.
Wednesday’s rally comes amid broader gains in technology stocks, with softer U.S. economic data and a drop in Treasury yields boosting markets on hopes the Federal Reserve will cut rates as early as July.
Nvidia has been the example of investor enthusiasm for AI, which gained momentum with OpenAI’s release of ChatGPT in late 2022.
The stock is up more than 140% this year and 200% last year; Nvidia shares are up more than 3,300% in the past five years. Over those same periods, the Nasdaq has gained a more modest 14%, 29% and 126%, respectively.
This week’s rally in Nvidia follows an announcement Sunday from CEO Jensen Huang, who said at an industry conference that the company will release a high-performance version of its Blackwell chip called the Blackwell Ultra in 2025, followed by a new AI chip platform Rubin in 2026. The company will debut an Ultra version of Rubin in 2027.
Nvidia is the technology industry’s go-to supplier for AI chips and integrated software.
Tech giants including Amazon (AMZN), Google (GOOG), Meta (META), Microsoft, Tesla (TSLA) and others are using the hardware to power everything from their cloud-based customer AI offerings to their own AI models and Services.
In the first quarter, Nvidia reported adjusted earnings per share of $6.12 on revenue of $26 billion, up 461% and 262%, respectively, from the same period a year ago.
Nvidia’s data center revenue rose 427% year-over-year to $22.6 billion in the most recent quarter, accounting for 86% of the company’s total revenue for the quarter. Nvidia’s gaming segment, which was previously its main business, generated revenue of $2.6 billion.
Nvidia also announced that its shares would undergo a 10-for-1 split on June 7, and that the company will increase its dividend from $0.04 per share to $0.10 per share.
But Nvidia isn’t the only game in town.
AMD (AMD) and Intel (INTC) are moving forward with their own AI chips with the aim of outsmarting Nvidia. AMD recently announced that its MI325X and MI350 will hit the market in 2024 and 2025 respectively, and said its next-generation MI400 AI accelerator platform will land in 2026.
Intel, meanwhile, said its Gaudi 2 and Gaudi 3 AI accelerators will undercut rival chips on price. And as companies spend billions on AI chips, any price savings will certainly be welcome.
Nvidia is also facing increasing competition from its own customers as Amazon, Google and Microsoft try to reduce their dependence on the company’s chips while cutting capital expenditures.
But for now, Nvidia continues to maintain its grip on the AI space, and will continue to do so for the foreseeable future.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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