Shares of Nvidia surged on Monday, nearing record highs and positioning the leading AI chipmaker to potentially surpass Apple as the world’s most valuable company.
Boosted by investor confidence in the demand for its upcoming Blackwell AI processors, the Santa Clara, California-based company’s stock rose 2.8% to $138.57, just shy of its intraday record high of $140.76 set on June 20. In June, Nvidia briefly held the title of the world’s most valuable company, only to be overtaken by Microsoft. Since then, the market capitalizations of the tech giants have been closely aligned.
Nvidia’s latest gains lifted its market value to $3.4 trillion, just below Apple’s $3.5 trillion and ahead of Microsoft’s $3.1 trillion. Nvidia has been Wall Street’s standout performer, benefiting from the fierce competition between Alphabet, Microsoft, Amazon, and other tech giants to lead the rapidly expanding AI sector.
“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 analysts noted in a report on Sunday. TD Cowen also reiterated its $165 price target for Nvidia, naming it their “Top Pick.”
Meanwhile, as investors prepare for the upcoming quarterly reporting season, Apple climbed 1.2% and Microsoft rose 0.9%, contributing to a 0.7% increase in the S&P 500, which also reached a record high. Taiwan Semiconductor Manufacturing Co, Nvidia’s chip producer, is expected to report a 40% jump in quarterly profit on Thursday, fueled by strong demand.
Analysts predict that spending on building AI data centers will help Nvidia’s annual revenue soar to nearly $126 billion, more than doubling its current figures, according to LSEG data. While Nvidia’s rally has bolstered the S&P 500, some investors are cautious, fearing that enthusiasm for AI could wane if signs of reduced spending on the technology begin to surface.
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