Nvidia Corp became the largest company in the world on Tuesday, surpassing Apple Inc and underscoring just how dominant artificial intelligence (AI) has become on Wall Street.
Shares rose 2.9 percent to US$139.93, resulting in a market capitalization of US$3.43 trillion, ahead of Apple at US$3.38 trillion. Microsoft Corp, which Nvidia passed last month, has a market cap of US$3.06 trillion. Nvidia has soared more than 850 percent since the end of 2022.
“Over the past several quarters, it has felt like people basically care about inflation numbers, job numbers and Nvidia numbers,” said James Investment Research director of research Fall Ainina.
Photo courtesy of Nvidia
“Nvidia overtaking Apple in market cap not only conveys that it is the biggest beneficiary of the AI infrastructure cycle, but it suggests people expect the AI boom will continue,” Ainina said.
The chipmaker accounts for 7 percent of the weight of the S&P 500 Index and is responsible for about a quarter of the benchmark’s 21 percent gain this year. Nvidia previously closed with the title of largest company in June, although it only held the record for a day.
The biggest companies on Wall Street are all heavily exposed to AI: 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 features and ad targeting. With the exception of Apple, these companies are all among Nvidia’s largest customers, and they have stressed their commitment to continuing to spend on AI.
Not only are the biggest companies by market cap AI plays, but so are the year’s top stock performers. Nvidia’s 183 percent advance is the third-largest in the S&P 500 this year, behind Vistra Corp — the power producer that has seen a surge in demand related to AI — and data-analysis software firm Palantir Technologies Inc.
“The implication of AI is extraordinarily large, and these big tech companies are investing hundreds of billions into it, with Nvidia benefiting the most,” Ainina said.
“Overall, there continues to be a good picture for its prospects,” Ainina added.
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