In a historic surge on Friday, Nvidia briefly surpassed Apple as the world’s most valuable company, reaching a peak market value of $3.53 trillion before closing at $3.47 trillion. Apple, which rose 0.4% during the day, ended with a valuation of $3.52 trillion, according to LSEG data. This remarkable achievement for Nvidia is largely driven by soaring demand for its AI chips, which are critical to the expanding field of artificial intelligence. Originally recognized for its gaming processors, Nvidia’s stock has surged approximately 18% in October alone, partly fueled by OpenAI’s recent $6.6 billion funding round and ongoing AI-driven investments.
Over the past year, Nvidia’s share price has skyrocketed nearly 190%, reflecting AI’s sustained momentum and the company’s dominant market position. The demand for data center chips received a further boost on Friday after Western Digital reported stronger-than-expected quarterly profits, which heightened optimism in the AI sector.
In contrast, Apple has faced challenges maintaining its top valuation due to declining iPhone demand, particularly in China, where third-quarter sales dipped by 0.3%, overshadowed by Huawei’s remarkable 42% sales growth. As Apple prepares to release its quarterly earnings report this Thursday, analysts predict a modest revenue growth of 5.55% to $94.5 billion. Nvidia, on the other hand, is expected to report an impressive revenue growth of nearly 82% year-over-year, reaching $32.9 billion.
Nvidia’s rise is not only a boon for the tech sector but also for the overall U.S. stock market, as the combined weight of Nvidia, Apple, and Microsoft accounts for nearly 20% of the S&P 500’s total value. With the stock market hitting record highs, optimism surrounding AI advancements and anticipated Federal Reserve interest rate cuts continue to fuel investor enthusiasm.
As AI adoption broadens across various industries, Nvidia’s options have become some of the most heavily traded, making its stock particularly appealing to traders, according to data from Trade Alert. However, experts warn that the excitement surrounding AI could lead to inflated valuations that may not reflect underlying realities.