Chip designer Nvidia overtook Apple’s market capitalization on Wednesday, making it the second most valuable company in the world after a period of significant stock gains driven by the artificial intelligence trend. At market close, Nvidia’s market cap stood at $3.012 trillion, surpassing Apple’s $3.003 trillion.
Earlier this year, Nvidia had already exceeded the market caps of companies like Amazon and Google. Despite this achievement, Nvidia still falls short of Microsoft’s market cap of $3.1 trillion. The company’s stock price reached a new high on Wednesday, closing at $1,224.40, an increase of more than 5%, and continued to rise slightly in after-hours trading.
Nvidia’s strong performance can be attributed to the company’s success in the semiconductor market, particularly in producing chips that power artificial intelligence applications. Approximately 80% of the semiconductor chips used for generative AI are designed by Nvidia, according to research from Goldman Sachs. This dominance in the AI chip market positions Nvidia for significant future earnings potential.
The company’s stock has more than doubled in value this year, surging by over 147% since January when it was trading at around $481 per share. Nvidia’s impressive list of customers includes tech giants like Apple, Meta, and Microsoft, with the latter contributing around 15% of Nvidia’s revenue. To make its stock more accessible to investors, Nvidia will undergo a 10-for-1 stock split after market close on Friday. This move is expected to attract more investors to the company’s high-performing stock.