Nvidia Surpasses Apple as World’s Most Valuable Company Amid AI Surge

A landmark shift in tech hierarchy sees Nvidia briefly dethrone Apple, powered by skyrocketing demand for AI chips

In a historic turn on Friday, Nvidia momentarily claimed the title of the world’s most valuable company, surpassing Apple. Nvidia’s stock market value surged to $3.53 trillion, just edging out Apple’s $3.52 trillion, according to data from LSEG. Although Nvidia ultimately closed the day with a valuation of $3.47 trillion, just below Apple’s $3.52 trillion, the event underscores the explosive growth Nvidia has enjoyed this year, driven by unprecedented demand for its specialized AI chips.

This isn’t Nvidia’s first rise to the top; in June, it briefly held the lead before being overtaken by Microsoft and Apple. Currently, Microsoft holds a market value of $3.18 trillion. For months, these tech giants have maintained neck-and-neck valuations, reflecting their roles at the cutting edge of tech innovation.

Nvidia’s ascent has been fueled by the boom in artificial intelligence (AI) technology, with the company becoming the chief supplier of processors critical for AI computing. Major tech players like Microsoft, Alphabet, and Meta Platforms are racing to advance AI capabilities, creating a favorable environment for Nvidia. While Nvidia initially gained prominence in the 1990s for its gaming processors, it now stands as a dominant player in the AI chip market. Its shares have risen about 18% this October alone, with momentum building following OpenAI’s recent $6.6 billion funding round.

On Friday, optimism for Nvidia and the semiconductor sector received another boost after Western Digital reported better-than-expected quarterly profits, reinforcing confidence in the strength of data center demand. Russ Mould, investment director at AJ Bell, pointed to AI’s influence across industries, stating that “More companies are now embracing artificial intelligence in their everyday tasks, and demand remains strong for Nvidia chips.”

As Nvidia enjoys this “sweet spot” in the tech market, analysts predict a strong revenue outlook, expecting a remarkable 82% revenue growth year-over-year to nearly $32.9 billion. This contrasts with Apple’s projected 5.55% revenue growth to $94.5 billion as the iPhone maker faces competition challenges, particularly in China, where iPhone sales have dipped while Huawei sales surged by 42%.

The influence of Nvidia, Apple, and Microsoft extends beyond the technology sector, with their stocks collectively accounting for about 20% of the S&P 500’s weight. The broader U.S. stock market has seen gains driven by optimism around AI, expectations of reduced interest rates from the Federal Reserve, and strong earnings results. Nvidia’s surging appeal has been evident in the options market, where it has become a popular trade as investors seek to capitalize on its growth trajectory.

While Nvidia’s stock has nearly tripled this year, the outlook for AI’s sustainability as a growth driver is under scrutiny. Rick Meckler, a partner at Cherry Lane Investments, voiced caution, suggesting the market must balance “the emotion of investors” with the reality of AI’s lasting impact.

Nvidia’s remarkable rise signals not only a shift in the tech hierarchy but also a broader transformation as industries adapt to the burgeoning influence of artificial intelligence.