Nvidia surpassed Apple in market capitalization on Wednesday, propelled by investor confidence in the chipmaker’s pivotal role in the artificial intelligence revolution. With this leap, Nvidia has now become the second-most valuable publicly traded company in the United States, following Microsoft.
On Wednesday, Nvidia achieved a significant milestone, hitting a $3 trillion market cap as its shares surged by over 5%. By the close of the market, Nvidia’s market value stood at $3.019 trillion, compared to Apple’s $2.99 trillion. Microsoft retains the top position with a market cap of $3.15 trillion.
Nvidia’s stock has climbed more than 24% since the company reported its first-quarter earnings in May, continuing a remarkable upward trajectory that began last year. The company commands an estimated 80% market share in AI chips for data centers, which are seeing substantial investment from major cloud service providers.
Investor confidence is growing regarding Nvidia’s ability to sustain its massive sales growth to a select group of cloud companies. In the latest quarter, revenue from its data center business, which includes GPU sales, soared by 427% year-over-year, reaching $22.6 billion. This segment accounts for approximately 86% of Nvidia’s total sales.
In contrast, Apple’s shares have risen only about 5% this year, as the company’s sales growth has stagnated in recent months. Apple’s latest quarterly earnings report revealed a 4% decline in overall sales and a 10% drop in iPhone sales compared to the previous year. The company is grappling with strategic challenges, including demand issues in China, manufacturing concerns, and mixed reactions to its new Vision Pro virtual reality headset.
Apple was historically the first company to achieve both $1 trillion and $2 trillion market caps and held the title of the most valuable U.S. company until Microsoft overtook it earlier this year. Microsoft has similarly benefited from increased investor interest in AI infrastructure.
While Nvidia’s stock has exhibited more volatility compared to Apple’s, its growth trajectory has been impressive. Founded in 1991 with a focus on gaming hardware, Nvidia has expanded into areas such as cryptocurrency mining chips and cloud subscription services. The company’s shares have skyrocketed by more than 3,290% over the past five years, underscoring the rapid development of its AI business. In May, Nvidia announced a 10-for-1 stock split, further highlighting its remarkable growth.
