Nvidia Approaches Apple's Market Crown with Record Stock Close

On Monday, shares of Nvidia (NVDA.O) reached an all-time high, putting the renowned AI chipmaker close to surpassing Apple (AAPL.O) as the world’s most valuable company.

The Santa Clara, California-based firm saw its stock rise by 2.4 percent, closing the day at $138.07. Investors are optimistic about the robust demand for Nvidia's existing and upcoming AI processors, leading to this record close.

In June, Nvidia briefly claimed the title of the world’s most valuable company before being overtaken by Microsoft. The market valuations of these tech giants have been closely contested for several months.

Following the recent surge, Nvidia now holds a market value of $3.39 trillion, just shy of Apple's $3.52 trillion and exceeding Microsoft's $3.12 trillion.

Nvidia has emerged as Wall Street’s top performer amid intense competition among tech leaders like Alphabet (GOOGL.O), Microsoft, and Amazon (AMZN.O) to lead in the rapidly evolving AI sector.

Analysts at TD Cowen highlighted that major players in AI are experiencing a challenging investment scenario, described as a "Prisoner’s Dilemma." Each company is incentivized to invest heavily, as failing to do so could result in significant consequences. In a report released on Sunday, TD Cowen maintained a $165 price target for Nvidia, labeling it their "Top Pick," and stated that demand for Nvidia's current AI chips remains strong.

In August, Nvidia confirmed delays in ramping up production of its next-gen Blackwell chips until the fourth quarter. However, the company minimized concerns by highlighting strong sales of its existing products.

As the market approaches the quarterly earnings reporting season, Apple’s share price climbed almost 2 percent while Microsoft’s increased by 0.7 percent, contributing to a 0.8 percent rise in the S&P 500 (.SPX), which also closed at a record high.

Nvidia, Apple, and Microsoft together comprise roughly 20 percent of the S&P 500's overall weight, significantly influencing the index's daily performance.

Taiwan Semiconductor Manufacturing Co (2330.TW), the manufacturer producing Nvidia’s processors, is expected to announce a 40 percent rise in quarterly profit on Thursday, driven by heightened demand.

Analysts project that investments in building AI data centers will enable Nvidia to more than double its annual revenue, reaching nearly $126 billion, according to data from LSEG.

While Nvidia's recent stock rally has helped elevate the S&P 500 to all-time high levels, investors remain cautious. There are concerns that if signs of a slowdown in AI spending emerge, the current optimism might quickly dissipate.

Nvidia, Apple, Stocks