Nvidia Nears Record High, Potentially Overtaking Apple

On Monday, shares of Nvidia (NVDA.O) reached their all-time high, advancing the prominent AI chipmaker closer to surpassing Apple (AAPL.O) as the most valuable company in the world.

Driven by investor optimism about robust demand for both current and future AI processors, Nvidia's stock rose 2.4 percent, closing at $138.07.

Back in June, Nvidia briefly secured the title of the world's most valuable company. However, it later lost this position to Microsoft, and the market capitalizations of these leading tech firms have been closely competing in recent months.

Following the latest rise, Nvidia's market capitalization is now valued at $3.39 trillion, positioned just below Apple, which stands at $3.52 trillion, while Microsoft holds a value of $3.12 trillion.

Nvidia has emerged as a key player in the competition among major technology firms like Alphabet (GOOGL.O), Microsoft, and Amazon (AMZN.O) for leadership in the rapidly evolving AI technology landscape.

As reported by analysts at TD Cowen, “We believe the major companies in AI... face an investment environment characterized by a Prisoner’s Dilemma — each is individually incentivized to continue spending, as the costs of not doing so are (potentially) devastating.”

TD Cowen has reiterated its $165 price target for Nvidia, labeling it as its “Top Pick,” and emphasized that demand for the company’s existing AI chips is still very strong.

In August, Nvidia confirmed that production of its upcoming Blackwell chips would be delayed until the fourth quarter. However, it reassured stakeholders that demand for the existing chips remains buoyant.

As the market anticipates quarterly reporting, Apple saw a nearly 2 percent increase in its shares, while Microsoft added 0.7 percent to its stock value. These gains collectively boosted the S&P 500 (.SPX) by 0.8 percent to a record high close.

Nvidia, Apple, and Microsoft together account for about one-fifth of the S&P 500’s market weight, granting them significant influence over the index’s daily fluctuations.

Additionally, the Taiwanese firm Taiwan Semiconductor Manufacturing Co (2330.TW), which produces Nvidia’s chips, is slated to report a remarkable 40 percent increase in quarterly profit on Thursday, driven by escalating demand.

Expectations are that spending on AI data centers will enable Nvidia's annual revenue to more than double, approaching nearly $126 billion, based on data from LSEG.

While Nvidia’s impressive stock performance has lifted the S&P 500 to new heights, some investors are expressing concerns that the excitement surrounding AI may diminish should signs of a slowdown in tech investment become apparent.

Nvidia, Apple, Stocks