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Nvidia passes Apple in market cap

Jensen Huang, co-founder and CEO of Nvidia, during the Nvidia GPU Technology Conference in San Jose, California, on March 19, 2024.

David Paul Morris | Bloomberg | fake images

NVIDIA approved Apple in market capitalization on Wednesday as investors continue to bet on the chipmaker behind the rise of artificial intelligence. It is now the second most valuable public company, behind Microsoft.

Nvidia also reached a $3 trillion market capitalization milestone on Wednesday after its shares rose more than 5%. At the close of the market, Nvidia had a market value of $3.019 billion, compared to Apple, which stood at $2.99 ​​billion. Microsoft is the most valuable publicly traded company, with a market capitalization of $3.15 trillion, as of Wednesday.

Nvidia shares have risen more than 24% since the company reported its first-quarter earnings in May and have been on the rise since last year. The company has an estimated 80% market share in AI chips for data centers, which are attracting billions of dollars in spending from large cloud providers.

Investors are also becoming more comfortable that Nvidia’s huge sales growth to a handful of cloud companies will persist. For the most recent quarter, revenue in its data center business, which includes its GPU sales, rose 427% from a year earlier to $22.6 billion, about 86% of the company’s total sales.

Meanwhile, Apple shares have risen only about 5% this year, as the iPhone maker’s sales growth has stalled in recent months. In its most recent quarterly earnings report, Apple said overall sales fell 4% and iPhone sales fell 10% from the same period a year earlier. Apple faces strategic questions and issues over demand in China, manufacturing and mixed reactions to its new virtual reality headset, Vision Pro.

Apple was the first company to reach a market capitalization of 1 trillion and 2 trillion dollars. It long held the title of most valuable American company, but Microsoft surpassed it earlier this year. Microsoft has also benefited from investor demand for AI infrastructure.

Nvidia has been more volatile as a stock than Apple. Founded in 1991, the company focused primarily on gaming and sold hardware for playing 3D computer games. More recently, it sold cryptocurrency mining chips and cloud subscription services.

Nvidia shares have gone parabolic as its artificial intelligence business has developed, rising more than 3,290% over the past five years. The company announced a 10-for-1 stock split in May.

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