Nvidia is riding the AI ​​wave and overtaking Apple as the world's largest company

(Bloomberg) – Nvidia Corp. became the world's largest company on Tuesday, overtaking Apple Inc. and underscoring how dominant artificial intelligence has become on Wall Street.

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Shares rose 2.9% to $139.93, giving it a market cap of $3.43 trillion, ahead of Apple at $3.38 trillion. Microsoft Corp., which Nvidia passed last month, has a market cap of $3.06 trillion. Nvidia is up more than 850% since the end of 2022.

“The last few quarters have had the feeling that people fundamentally care about inflation numbers, jobs numbers and Nvidia numbers,” said Fall Ainina, director of research at James Investment Research. “Nvidia overtaking Apple in market capitalization not only shows that the company is the biggest beneficiary of the AI ​​infrastructure cycle, it also suggests that people expect the AI ​​boom to continue.”

The chipmaker accounts for 7% of the weight of the S&P 500 index and accounts for about a quarter of the benchmark's 21% rise this year. Nvidia tied for the title of largest company back in June, but only held the record for one day.

Wall Street's biggest companies are all heavily exposed to artificial intelligence: Apple, with its newly launched AI iPhones; Microsoft, Amazon.com Inc. and Alphabet Inc. with their cloud businesses and AI services; and Meta Platforms Inc.'s AI capabilities and ad targeting. With the exception of Apple, these companies are all among Nvidia's largest customers and have emphasized their commitment to continue investing in AI.

Last week, Apple's results underscored concerns about the company's sales growth as well as weakness in China. Nvidia will report later this month.

Not only are AI stocks the largest companies by market capitalization, but they are also the best performing stocks of the year. Nvidia's 183 percent rise is the third largest in the S&P 500 this year, behind Vistra Corp. — the power producer seeing a surge in AI-related demand — and data analytics software company Palantir Technologies Inc.

The latest strength came as the company eased investor concerns about problems with its Blackwell chip, which was delayed due to technical issues, as well as its long-term growth prospects.

Analysts expect Nvidia's revenue to more than double in the current fiscal year and rise another 44% the following year, according to data compiled by Bloomberg. Wall Street analysts have continually raised estimates for Nvidia's earnings and profit over the past quarter.

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