Nvidia, the leading beneficiary of the AI boom, is poised to overtake Apple as the world's second-most valuable company.
As per Reuters, the surge in demand for AI applications, which relies heavily on Nvidia's high-end chips, has driven the company's stock price to nearly triple in value over the past year, reaching $2.68 trillion.
In contrast, Apple, once the top-ranking Wall Street firm by market value, was surpassed by Microsoft earlier this year.
This shift occurred as a result of declining iPhone demand and intense competition in China.
With a current valuation of $2.92 trillion, Apple faces challenges amid a slowdown in its innovation momentum.
Meanwhile, Brian Mulberry, client portfolio manager at Zacks Investment Management, noted, "It is certainly notable because Apple has been so dominant for so long, especially on the growth and innovation front. Recently though, Apple's innovation curve seems to have flattened, showing slower future growth.”
He added, “On the other hand, Nvidia has been able to catch wave upon wave of growth. Beginning with gaming demand, then crypto and now AI, they have been able to perfectly match innovation with demand and that equals explosive growth."
Nvidia's rapid growth is underscored by its journey from $1 trillion to $2 trillion, outpacing tech giants like Amazon, Google's Alphabet, and Saudi Aramco in 2024.
Despite consistently surpassing Wall Street's expectations, the company faces supply challenges as demand for its graphic processors continues to outstrip supply in the AI-driven market.
While, Nvidia's forward earnings valuation has dipped from 48 times earnings a year ago to 37 times, its popularity remains high in the derivatives market.
