05/28/2024 – 17:16
Nvidia shares rose around 7% this Tuesday, reaching a record high, with the artificial intelligence chip maker’s market value around $100 billion away from surpassing Apple, in a major rearrangement between two of the biggest players on Wall Street.
With the stock trading at $1,128, Nvidia’s market capitalization reached $2.8 trillion, compared to Apple’s $2.9 trillion market cap, which is the second most valuable company on Wall Street after from Microsoft.
+ Understand how Nvidia burst the Big Tech bubble and became a technology giant
Nvidia shares rose 8% to $1,149.39 during the session, an intraday record. Apple shares, in turn, fell 0.2% in afternoon trading.
Nvidia’s shares have already risen almost 13% since the company last week forecast revenues exceeding Wall Street’s expectations for the second quarter and announced a stock split, which encouraged investors as they continue to bet on the “darling” of AI.
“The market has struggled to keep up with the company’s ever-improving growth trajectory. With a forward earnings multiple in the mid-thirties, this still doesn’t look like a bubble,” said Derren Nathan, head of equity analysis at Hargreaves Lansdown.
Nvidia recently traded at 36 times its forward earnings estimates, compared with 38 for Advanced Micro Devices and 21 for Intel, according to LSEG data.
Nvidia, which has been one of the biggest beneficiaries of the AI boom, reported a fivefold jump in revenue in its data center segment last week as customers lined up to buy its high-performance chips.
Alphabet, Microsoft, Amazon.com and other technology companies have been competing for a limited supply of Nvidia’s next-generation chips as they seek to dominate AI computing.
Microsoft surpassed Apple as the world’s most valuable company earlier this year as it surged ahead of other technology companies due to gains made by early investments in AI in its cloud services.
Microsoft shares fell 0.4% on Tuesday, giving it a market value of $3.1 trillion.
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