Nvidia catches up with Apple and becomes the most valuable company in the world | Financial markets
The buzz around artificial intelligence has led to Nvidia overtaking Apple to become the most valuable company in the world. The microprocessor company hit new highs ($144.13 per share), up more than 2% on the day, enough to push its market cap to $3.53 billion and place it above Apple’s $3.52 billion. Levels it lost shortly thereafter to the iPhone maker. This is the second attempt in which Nvidia manages to become the most capitalized company in the world, given that it managed to conquer the podium in June, only to lose it a few days later to Microsoft and Apple.
The company benefited from a rally that tech companies experienced following Tesla’s quarterly earnings, putting behind weeks of market doubts about whether the tech fever was fading. Investors are starting to differentiate between a wide range of technology companies and are focusing their bets on anything related to artificial intelligence over the rest. ASML’s earnings forecast cut has investors worried, although TSMC’s earnings helped calm nerves and clear up uncertainty.
Nvidia’s stock market sprint was supported in the latest section by Bank of America, which last week raised its price target for the next 12 months to $190 from a previous $165, given that it estimates the company could generate $272 billion in revenue dollars in 2030 are associated with artificial intelligence. Analysts at the US investment bank emphasize “confidence in Nvidia’s competitive leadership and generational capabilities.” At the same time, they highlight the “growing presence of AI in companies where Nvidia is the partner of choice” and believe that the company is undervalued despite the strong growth it has accumulated in recent years.
Bank of America analysts also estimate that the potential of AI could generate $200 billion in free cash flow for the company over the next two years. He estimates Nvidia’s valuation relative to its earnings is “compelling” compared to other tech giants.
In the coming weeks, Nvidia will have to introduce itself to the market with its third-quarter results. The results will be scrutinized after the company disappointed in August over its future estimates and production problems with Blackwell’s new chip, even as its revenue rose 122% to $30.04 billion and net profit rose 168%. , reaching $16.599 million, setting a new record. Nvidia has accumulated a 190% overvaluation so far this year, exceeding the 2,700% over the past five years. According to a Bloomberg Markets Live Pulse survey, 45% of respondents believe Nvidia’s results will push Nvidia shares higher, even with strong gains driven by demand for AI.
Demand for Blackwell’s new chips is “crazy,” according to Nvidia CEO Jensen Huang, something the company will have to deal with. The optimism was enough to lift shares nearly 20% over the past 30 days, compared with 1% for Apple or 0.9% for Microsoft, and prompted analysts to predict Nvidia would become the first listed company to reach a market capitalization of 4 billion dollars. the previous record of 3 billion was reached by Apple in 2022. Morgan Stanley estimates the new chip model will generate $10 billion in additional revenue by the end of this year.