Nvidia Surpasses Apple with $3 Trillion Market Cap, Becoming Second Most Valuable US Company

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Nvidia Surpasses Apple to Become Second Most Valuable US Company with $3 Trillion Market Cap

Team FS

06/Jun/2024

Key Points:

Nvidia's market cap reaches $3.01 trillion, surpassing Apple and becoming the second most valuable publicly traded US company.
Nvidia's stock has risen 29% in nine trading sessions since its latest quarterly results, driven by strong AI chip sales.
Apple's market cap stands at $2.99 trillion, with stagnated growth in its core markets and declining iPhone sales.

Nvidia, the leading chip manufacturer, has crossed a significant milestone by achieving a market capitalization of $3.01 trillion, surpassing Apple Inc., the renowned iPhone producer. This remarkable feat makes Nvidia the second most valuable publicly traded company in the United States, trailing only behind Microsoft, which remains at the top with a market cap of $3.15 trillion. Nvidia's shares experienced a substantial 5% surge on Wednesday, marking a historic moment for the company and the tech industry.

This is not the first time Nvidia has overtaken Apple in terms of market value. Interestingly, the last occurrence was two decades ago in 2002, a time when both companies were valued under $10 billion. This was five years before Apple revolutionized the tech world with the launch of the first iPhone. Nvidia's impressive market cap journey began in May 2023 when it first crossed the $1 trillion mark. The company then reached $2 trillion for the first time in February 2024, showcasing a rapid growth trajectory.

Nvidia's recent stock performance has been nothing short of phenomenal. In just nine trading sessions following the announcement of its quarterly results on May 22, the stock has soared by 29%. This surge is largely attributed to Nvidia's dominant position in the AI chip market, specifically for data centers. Nvidia is reported to hold an 80% market share in this sector, with major cloud service providers investing heavily in AI technology, thereby driving demand for Nvidia's products.

For the most recent quarter, Nvidia's GPU (Graphics Processing Unit) sales skyrocketed by an astonishing 427% year-on-year, exceeding $22 billion. This accounted for nearly 86% of the company's overall revenue. Additionally, Nvidia announced a 10-for-1 stock split and increased its quarterly dividend by 150%, reflecting its robust financial health and confidence in future growth.

In contrast, Apple has faced challenges in maintaining its growth momentum. The company's shares have only risen by 5% so far in 2024. Apple's latest earnings report revealed a 4% decline in overall sales, with iPhone sales dropping by 10% compared to the same quarter the previous year. The tech giant has been grappling with reduced demand in China and mixed reactions to its new virtual reality headset, Vision Pro.

Despite these challenges, Apple holds the distinction of being the first company to achieve market caps of $1 trillion, $2 trillion, and $3 trillion. It has also been the most valuable company for an extended period before being surpassed by Microsoft earlier this year. However, with Nvidia's rapid ascent, the landscape of the tech industry's most valuable companies is experiencing significant shifts.

Nvidia's shares closed at $1,224.40, up 5.2% overnight, reflecting investor confidence and optimism about the company's future prospects. The surge in Nvidia's market cap is a testament to the growing importance and demand for AI technology, positioning Nvidia as a key player in the tech industry's future.

In summary, Nvidia's achievement of a $3 trillion market cap and its surpassing of Apple marks a significant milestone in the tech industry. Driven by strong performance in the AI chip market and impressive financial results, Nvidia's rapid rise highlights the evolving dynamics of the tech sector. Meanwhile, Apple faces challenges in sustaining its growth, with declining sales and mixed responses to new product launches. The competition among tech giants for market dominance continues to intensify, promising exciting developments in the near future.

Also Read : India Sees Robust FDI Growth with US$ 70.9 Billion Inflow in FY24, Led by Construction and Power Sector

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Nvidia Surpasses Apple to Become Second Most Valuable US Company with $3 Trillion Market Cap

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