Nvidia Climbs Past Apple to Secure Spot as Second-Most Valuable US Public Company
Nvidia’s Unstoppable Growth
Nvidia, famed for its cutting-edge graphics processing units (GPUs), has seen a remarkable increase in its market capitalization, now valued at around $3.019 trillion, surpassing Apple’s $3 trillion. This extraordinary growth is driven by Nvidia’s strategic focus on artificial intelligence (AI) and data center markets, both experiencing rapid expansion. Nvidia’s GPUs, essential for AI and machine learning applications, have boosted revenue significantly by powering technologies like autonomous vehicles and advanced robotics.
The company’s substantial progress in the data center market, where its GPUs support cloud computing and big data analytics, resulted in a staggering $26 billion in data center revenue last fiscal year, marking a 262% year-over-year increase. Additionally, Nvidia’s continued leadership in the gaming GPU market, with its highly popular GeForce series, contributed $12.4 billion to its annual revenue, reinforcing its dominant position in the industry.
Outstanding Financial Performance and Market Cap Growth
Nvidia’s shares saw a 5% increase recently, pushing the company’s market cap beyond $3 trillion. The market closed with Nvidia at $3.019 trillion, while Apple stood at $2.99 trillion. Currently, Nvidia remains above $3.01 trillion, with Apple slightly up to $3 trillion. Nvidia’s stock has risen nearly 11% in the past five days and approximately 38% over the last month. Since January, the stock has surged over 147% and more than 24% since its Q1 earnings report in May.
Nvidia’s Q1 fiscal 2024 results are remarkable: GAAP earnings per diluted share were $5.98, marking a 21% increase from the previous quarter and a staggering 629% rise from the previous year. Non-GAAP earnings per diluted share reached $6.12, a 19% increase from the previous quarter and a 461% rise year-over-year. The company’s quarterly revenue hit $26 billion, a 262% increase from the previous year and an 18% rise from the previous quarter. For Q2 fiscal 2025, Nvidia projects revenue of $28 billion, up from $26 billion in Q1.
Implications of Nvidia’s Market Ascent
Nvidia’s rise to the second position carries substantial implications for the tech industry and the stock market. The company’s success underscores the growing significance of AI and data analytics, prompting many companies to invest heavily in these areas to remain competitive. Nvidia’s leadership in GPU technology solidifies its position as a crucial player in shaping the future of technology.
The stock market has reacted positively to Nvidia’s ascent, with its shares experiencing notable gains, reflecting investor confidence in the company’s growth prospects. Conversely, Apple’s stock has faced volatility, influenced by supply chain disruptions and intense competition within the smartphone market.
Slower Growth and Challenges for Apple
Apple has experienced significantly slower growth compared to Nvidia. According to MarketWatch data, Apple Inc (NASDAQ: AAPL) has only seen a 1.73% increase in its stock since January and a 6% rise in the past month. In fiscal Q2 2024, which ended on March 30, Apple reported quarterly revenue of $90.8 billion, a 4% decline year-over-year. Additionally, iPhone sales dropped 10% compared to the previous year.
The company’s iPhone revenue was $45.96 billion, slightly below the $46 billion expected, while iPad revenue came in at $5.6 billion, missing the $5.91 billion estimate. However, Mac’s revenue exceeded expectations, reaching $7.5 billion compared to the projected $6.86 billion. Notably, Apple did not provide an official outlook for the next quarter.
Several challenges have impacted Apple’s performance, including manufacturing issues, reduced demand—especially in China—and mixed reactions to its new virtual reality headset, the Vision Pro. Apple previously held the title of the most valuable company in the United States and was the first to reach $1 trillion and $2 trillion market caps. However, Microsoft surpassed Apple earlier this year, benefiting from its involvement in AI, similar to Nvidia.
Investors are highly interested in Nvidia due to the widespread use of its chips in various AI projects, fueling the ongoing AI boom. Nvidia’s ascent to the second-most valuable publicly traded company in the US is a significant milestone for the tech industry. The company’s strategic focus on AI, data centers, and gaming has driven substantial growth, securing its position for continued success. As Nvidia continues to innovate and expand, it is set to shape the future of technology and maintain its leadership. Nvidia’s journey highlights the importance of strategic foresight and innovation, underscoring the dynamic nature of the tech industry and its vast potential.