(Bloomberg) — Nvidia Corp. was already the most valuable semiconductor company in the world. Today, it has become the first computer chip company to reach a market capitalization of $3 trillion.
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Shares of the Santa Clara, Calif.-based company have risen about 147% this year, adding about $1.8 trillion as insatiable demand for its chips used to power artificial intelligence tasks soars . On Wednesday, shares rose 5.2% to close at a record high of $1,224.40, pushing the market value past $3 trillion and surpassing Apple Inc. in the process.
The last time Nvidia was worth more than Apple was in 2002, five years before the first iPhone was released. At the time, both companies were worth less than $10 billion each.
Nvidia has shown no signs of slowing down or letting its competitors catch up; The company’s CEO, Jensen Huang, said the company plans to upgrade its so-called AI accelerators every year. Wednesday’s stock market gain increased his wealth by more than $5 billion, to $107.4 billion, according to the Bloomberg Billionaires Index.
The rise of generative AI constitutes a new industrial revolution and Nvidia expects to play a major role in the technological transition to personal computers, Huang told attendees in a speech at National Taiwan University .
“We’re seeing this sea change from the very beginning,” said Angelo Zino, senior equity analyst at CFRA Research.
After the CEO’s keynote, Zino said he appreciated the “improved visibility” and saw “greater momentum on the GPU/CPU/network side, driving upside versus consensus estimates.”
The company has arguably been the biggest beneficiary of a massive influx of AI spending, helping it enter a race to claim the title of the world’s most valuable company. The chipmaker still lags behind Microsoft Corp. in terms of market value, but with shares in freefall, Wall Street sees it as only a matter of time before Nvidia overtakes it.
Apple has struggled this year, with the tech giant’s shares under pressure from concerns about slowing iPhone demand in China and a fine from the European Union. The company’s shares only recently turned positive for 2024, as investor sentiment toward the iPhone maker slowly improves.
–With help from Bre Bradham.
(Updates with Huang’s wealth increase in fourth paragraph.)
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