Zaheer Kachwala
(Reuters) – Nvidia shares rallied nearly 6 percent to hit a record high on Tuesday, pushing the AI chipmaker's stock market value nearly $100 billion past Apple to become one of Wall Street's biggest players. There was a big change.
At last trading at $1,128, Nvidia's market capitalization reached $2.8 trillion, compared with a market value of $2.9 trillion for Apple, which is Wall Street's second most valuable company after Microsoft.
Its stock rose 8% during the session to $1,149.39, an intraday record high. Apple stock was down 0.2 percent in afternoon trading.
Shares of Nvidia have risen nearly 13 percent since it last week forecast second-quarter earnings that beat Wall Street expectations and announced a stock split, which excited investors as it plans to launch AI. Keep betting on the poster child.
Darren Nathan, head of equity analysis at Hargreaves Lansdown, said, “The market is struggling to keep up with the company's ever-improving growth momentum. In multiples of earnings beyond the mid-thirties, it Still doesn't feel like bubble territory.”
Nvidia recently traded at 36 times its forward earnings estimate, compared with 38 for Advanced Micro Devices and 21 for Intel, according to LSEG data.
Shares of the company have more than doubled so far this year after tripling last year.
Nvidia, one of the biggest beneficiaries of the AI boom, reported a fivefold increase in revenue in its data center segment last week as customers queued up for its high-performance chips.
Alphabet, Microsoft, Amazon.com and other technology giants are competing for a limited supply of Nvidia's high-end chips as they race to dominate AI computing.
“Business is doing incredibly well, there's a lot of room for growth, and the AI theme still has legs,” said Dan Coatsworth, investment analyst at AJ Bell. , so investors want to keep humming it throughout the day, AJ Bell investment analyst Dan Coatsworth said when asked about the stock's rally.
Long considered a must-own stock on Wall Street, Apple has underperformed other big tech companies in recent months, falling about 2 percent this year as it struggles with weak iPhone demand and in China. Facing stiff competition.
Microsoft overtook Apple as the world's most valuable company earlier this year as it outpaced other tech firms due to gains from early investments in artificial intelligence in its cloud services.
Microsoft shares fell 0.4 percent on Tuesday, giving it a market value of $3.1 trillion.
Apple has also been slow to introduce generative AI, which can produce human-like responses to written gestures, compared to rivals such as Microsoft and Google, which are building them into products.
(Reporting by Zaheer Kachwala and Arshia Bajwa in Bangalore; Additional reporting by Noel Randwich in San Francisco; Editing by Arun Quiver)