Nvidia passed Apple in market valuation on Wednesday as investors continue betting on the chipmaker behind the artificial intelligence boom. It is now the second-most valuable public company, behind Microsoft. Shares of Nvidia rallied to record highs on Wednesday, with the AI chipmaker‘s stock market valuation hitting the $3 trillion mark. The latest share rally in Nvidia comes as it prepares to split its stock ten-for-one, effective on June 7, a move that could increase its appeal to individual investors.
Nvidia’s market valuation
The surge in Nvidia’s stock market valuation above Apple’s underscores a shift in Silicon Valley, where the company co-founded by Steve Jobs has dominated since it launched the iPhone in 2007.
Nvidia also hit a $3 trillion market valuation milestone on Wednesday after shares rose over 5%. At market close, Nvidia had a market value of $3.019 trillion, versus Apple’s, which stood at $2.99 trillion. Microsoft is the most valuable publicly traded company, with a market cap of $3.15 trillion, as of Wednesday.
Nvidia’s growth in sales
Nvidia has an estimated 80% market share in AI chips for data centers, which are attracting billions of dollars in spending from big cloud vendors.
Investors are also becoming more comfortable that Nvidia’s huge growth in sales to a handful of cloud companies can persist. For the most recent quarter, revenue in its data center business, which includes its GPU sales, rose 427% from a year earlier to $22.6 billion, about 86% of the company’s overall sales.
Nvidia beats Apple
Apple shares are up only about 5% this year, as the iPhone maker’s sales growth has stalled in recent months. In its most recent quarterly earnings report, Apple said overall sales dropped 4% and iPhone sales fell 10% from the year-ago period.
Apple was the first company to reach a $1 trillion and $2 trillion market cap. It long held the title of most valuable U.S. company but was passed by Microsoft earlier this year. Microsoft has also benefited from investor demand for AI infrastructure.
Nvidia has been more volatile as a stock than Apple. Founded in 1991, the company was primarily targeting gaming, selling hardware to play 3D computer games. More recently, it sold cryptocurrency mining chips and cloud subscription services.
Nvidia shares rise
Nvidia shares have risen more than 24% since the company reported first-Q1 earnings in May and have been on a tear since last year. Nvidia shares have gone parabolic as its AI business has developed, rising more than 3,290% over the past five years. The company announced a 10-for-1 stock split in May.
