Nvidia on Track to Become Second-Most Valuable Company

Nvidia’s role in the artificial intelligence market could reportedly make it the world’s second-most valuable company.

The chip maker could overtake Apple to assume the position, behind No. 1 ranked Microsoft, Reuters reported Friday (May 31).

In January, Microsoft took the top spot from Apple.

Nvidia’s growth has been driven by its status as the provider of the chips that power virtually all AI applications, the report said.

The company’s stock has nearly tripled in value over the past year to $2.68 trillion, has played a role in driving U.S. stocks to record highs, and has accounted for more than a third of the gains made by the S&P 500 this year, per the report.

So far during 2024, Nvidia’s value has already grown to top that of Amazon, Alphabet and Saudi Aramco, according to the report.

The company’s earnings, reported May 22, showcased the ongoing strength of the AI boom, with its revenue reaching $26 billion, up 18% from the previous quarter and 262% from the same period last year. Its sales and profit exceeded Wall Street expectations.

Fueled by the demand for generative AI training and inference across various industries, the revenue of Nvidia’s Data Center business unit rose 23% from the previous quarter and 427% from the same quarter in 2023.

Nvidia founder and CEO Jensen Huang said during the company’s May 22 earnings call: “Generative AI is driving a from-foundation-up full-stack computing platform shift that will transform every computer interaction. From today’s information retrieval model, we are shifting to an answers and skills generation model of computing. AI will understand context and our intentions, be knowledgeable, reason, plan and perform tasks.”

Before the company reported earnings, investors and analysts were watching for the event as a bellwether for the entire AI industry. The AI arms racing has been heating up, with companies scrambling to secure their piece of the pie and other tech giants like Microsoft, Google and Amazon also heavily investing in the technology.

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.