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Nvidia’s market value soared above $3 trillion, overtaking Apple on Wednesday as the world’s second most valuable company after a year of incredible growth driven by demand for its artificial intelligence chips.
Shares of the American chip designer rose by about 5 percent, making its market capitalization higher than that of Apple for the first time. According to Bloomberg data, the day ended at $3.01 trillion, slightly more than Apple’s $3 trillion. The iPhone maker lost its place as the most valuable listed company to Microsoft earlier this year.
Investors have flocked to Nvidia stock as tech groups like Google, Microsoft and Meta spend billions of dollars on its chips, with no indication that their spending will slow in the near future.
Nvidia’s data center chips are powering the AI models that CEO Jensen Huang claims will fuel a new “industrial revolution” that will transform global business with productivity-enhancing features.
The company delivered another blockbuster earnings report in May, with sales up 262 percent year-over-year, thanks in large part to sales of the current generation of “Hopper” chips. It also announced a 10-for-one stock split, effective June 7.
According to Bloomberg data, Nvidia has single-handedly generated more than a third of the gains in Wall Street’s S&P 500 index this year, raising fears in some quarters of an unsustainable bubble. The S&P 500 rose 1.2 percent on Wednesday and is up 12.3 percent year to date.
Still, Nvidia’s huge profits and repeated upgrades to forecasts mean the company’s valuation is not at all-time highs when measured against historical or expected profits.
On Wednesday, the stock was valued at approximately 42 times expected earnings over the next twelve months. That’s up from about 23 times expected earnings at the start of the year and well above Apple’s 29x – although that’s lower than the peak reached during the height of the first wave of AI euphoria last year.
“The advantage they have is that they are one of the few companies that can actually prove AI revenue,” said Stuart Kaiser, head of U.S. equity trading strategy at Citigroup. “The higher [the stock] and the further you get into this revenue cycle, the more the risks increase, but so far it looks pretty clean.”
Despite attempts by rivals like AMD and Intel to grab some of Nvidia’s market share, Nvidia remains the undisputed leader in the global technology race to offer the most advanced hardware for increasingly demanding AI workloads, as well as the software tools to Build AI applications.
Huang has promised a “one-year pace” of new chips and unveiled Nvidia’s “Blackwell” products in March. Huang has said they would generate “a lot” of revenue this year – sooner than many analysts had predicted.
And in a surprise move, at the Taiwanese Computex conference last weekend, Huang also teased the next generation of “Rubin” processors, which will hit the market in 2026.
Apple will hold its annual Worldwide Developers Conference on June 10, where CEO Tim Cook is expected to outline the company’s own plan for integrating generative AI features into its products.
Apple has so far been left out of the market hype around generative AI, which has sent its rivals’ shares soaring. Sales of its iPhones are also declining year over year, partly due to resurgent competition in China.
But Cook has said he was “optimistic” about the prospects in AI, and Apple shares have also recovered from a slump at the start of the year, when Apple announced a $110 billion share buyback in May which was bigger than expected.