Nvidia on Wednesday, June 5, surpassed Apple to become the second most valuable company in the world. With a market capitalization of $3.01 trillion, Nvidia has surpassed the market cap of Apple, which now has $3 trillion valuation. Microsoft tops the list with a $3.15 trillion market cap, while Meta, at the bottom, is valued at $1.25 trillion. Going by the impressive performance, Nvidia is all set to topple Microsoft as the most valuable company in the world.
Meanwhile, the U.S. Justice Department and the Federal Trade Commission have reached a deal that allows them to proceed with antitrust investigations into the dominant roles that Microsoft, OpenAI and Nvidia play in the artificial intelligence industry, the New York Times reported on Wednesday, citing people familiar with the matter.
Nvidia has emerged as the new star in the global investment arena, dazzling investors with its remarkable performance. Following Elon Musk’s statement that his AI firm, xAI, would need 100,000 semiconductors from Nvidia to build a supercomputer, the company’s shares shot to new heights. This increase demonstrates Nvidia’s pivotal role in the developing AI sector.
Joining the elite club of US companies with market caps exceeding $1 trillion, Nvidia now stands shoulder to shoulder with tech giants like Microsoft, Apple, Alphabet, Amazon, and Meta Platforms. With a market capitalization of $2.87 trillion, Nvidia is closing in on Apple, which is ahead with $2.91 trillion valuation. Microsoft tops the list with an impressive $3.19 trillion market cap, while Meta, at the bottom, is valued at $1.20 trillion.
The explosive rise in Nvidia’s share price has stunned many, except for those who would have invested early. ““NVIDIA Corporation (NVDA) traded below $115 in October of 2022. The stock closed at $1,139.01 on May 28, a nearly 10-fold increase in about 20 months. The stock continues to rally, up 20% since the eve of May 22 when the company beat earnings expectations. Analysts expected $5.60 in profit per share for the quarter and posted standardized earnings of $5.98. They also beat revenue estimates by nearly 6%.,” says Cory Mitchell, an analyst with Trading.biz.
This performance has also caught the attention of Indian investors. Viram Shah, CEO of Vested Finance, says, “A 9% increase in Nvidia’s stock on May 23, accompanied by a sixfold surge in trading volume and a tripling of the number of traders compared to the previous week’s daily average. Approximately 10 crore INR worth of Nvidia shares were traded, reflecting significant market interest.
The market’s bullish outlook extends beyond Nvidia. The ‘Magnificent 7,’ comprising Apple, Microsoft, Nvidia, Amazon, Meta, Tesla, and Alphabet, now dominates discussions, following the remarkable success of the FAANG stocks.
José Torres, Senior Economist at Interactive Brokers says, “Nvidia’s quarterly revenue more than tripled year over year (y/y) with the company reporting data center sales growing more than 400%. While its earnings and revenue exceeded analyst consensus expectations, Nvidia’s explanation that customers are generating profits from artificial intelligence eased investors’ concerns that the new technology could be more fluff than stuff. CFO Colette Kress says Nvidia customers can generate immediate and strong returns on their tech investments. In one example, customers can generate $7 in revenue over four years for every dollar they spend on Nvidia’s HDX H200 server, which is used for accessing Met’s AI.”
Nvidia’s meteoric rise, coupled with the robust performance of the ‘Magnificent 7,’ underscores the dynamic and evolving landscape of global tech investments.