AI Frenzy Catapults Nvidia’s Value Toward Market Summit

Amid a surge that echoes the rapid advancements and growing fascination with artificial intelligence, Nvidia is reportedly on the verge of overtaking Apple as the world’s second-most valuable company.

At the core of Nvidia’s rise is its dominant position in the high-end AI chip market, in which it commands an 80% share, and a ravenous market demand for AI capabilities, Reuters reported Friday (March 8).

This dominance has translated into a valuation leap. The company’s worth ballooned from $1 trillion to over $2 trillion in nine months — a feat that has seen it overtake Amazon, Google’s parent company Alphabet and Saudi Aramco, according to the report.

As of Friday, Nvidia’s market capitalization was nearing the $2.38 trillion mark, placing it $230 billion shy of Apple and $645 billion behind the leader, Microsoft, the report said.

While Nvidia enjoys the limelight, Apple faces challenges, with slowing iPhone sales causing it to surrender its most valuable company crown to Microsoft in January, the report said.

Nvidia’s rise has contributed to pushing Wall Street to record highs this year, with Nvidia now accounting for more than 5% of the benchmark S&P 500 index, per the report.

The company’s stock performance, with a 95% uptick, has outpaced other tech behemoths, according to the report.

“Nvidia’s rally reflects the incredibly strong fundamentals underlying its current business model,” Richard Meckler, a partner at Cherry Lane Investments, said in the report.

David Wagner, portfolio manager at Aptus Capital Advisors, said in the report: “We continue to believe that in five years or 10 years, we will all be talking about an industry that is far larger than the numbers being bandied about today.”

Nvidia’s earnings report released Feb. 21 put to bed any questions about whether the ongoing hype around AI would turn into real, tangible market value, PYMNTS reported at the time.

During an earnings call, Nvidia founder and CEO Jensen Huang said: “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.”

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