By Zaheer Kachwala
(Reuters) – Nvidia shares rose about 6% to a record high on Tuesday, leaving the AI chipmaker’s stock value about $100 billion from overtaking Apple in a major shakeup of the most big players on Wall Street.
Last seen at $1,128, Nvidia’s market capitalization reached $2.8 trillion, compared to a market value of $2.9 trillion for Apple, which is the second most valuable company on Wall Street after Microsoft.
Its stock jumped 8% to $1,149.39 during the session, an intraday record. Apple stock was down 0.2% in afternoon trading.
Nvidia shares have jumped nearly 13% since it forecast second-quarter revenue above Wall Street expectations last week and announced a stock split, enthusing investors who continue to bet about the poster child of AI.
“The market is struggling to keep up with the company’s ever-improving growth trajectory. With a forward earnings multiple in the mid-30s, it still doesn’t look like bubble territory,” said Derren Nathan, head of stock analysis at Hargreaves Lansdown.
Nvidia recently traded at 36 times its forward earnings estimates, compared to 38 for Advanced Micro Devices and 21 for Intel, according to LSEG data.
The company’s shares have more than doubled so far this year, after more than tripling last year.
Nvidia, which has been one of the biggest beneficiaries of the AI boom, last week reported a five-fold increase in revenue in its data center segment as customers lined up for their high-end chips performance.
Alphabet, Microsoft, Amazon.com and other technology companies are competing for a limited supply of high-end chips from Nvidia as they try to dominate AI computing.
“Business is doing incredibly well, there are so many growth opportunities and the AI theme still has weight. When the song is this catchy, investors want to keep humming it all day,” said Dan Coatsworth, investment analyst at AJ Bell. when asked about the stock’s rally.
Long considered a hot stock on Wall Street, Apple has underperformed other big tech companies in recent months, falling about 2% this year, due to weak iPhone demand and tough competition in China.
Microsoft overtook Apple as the world’s most valuable company earlier this year, outpacing other tech companies on gains from early investments in artificial intelligence in its cloud services.
Microsoft shares were down 0.4% on Tuesday, giving it a market value of $3.1 trillion.
Apple has also been slower to deploy generative AI, which can generate human-like responses to written prompts, than rivals such as Microsoft and Google, which integrate them into their products.
(Reporting by Zaheer Kachwala and Arsheeya Bajwa in Bangalore; Additional reporting by Noel Randewich in San Francisco; Editing by Arun Koyyur)
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