Nvidia, the semiconductor powerhouse renowned for its AI innovations such as ChatGPT, is swiftly closing in on Apple‘s position as the world’s second-most valuable company. In an astonishing surge fueled by advancements in artificial intelligence, Nvidia’s market capitalization has skyrocketed from $1 trillion to over $2 trillion in a mere nine months.
Along this meteoric rise, it has surpassed giants like Amazon.com, Google-parent Alphabet, and Saudi Aramco, as reported by CNBC-TV18.
With a current valuation hovering around USD 2.38 trillion, Nvidia finds itself trailing Apple by approximately USD 230 billion and Microsoft by roughly USD 645 billion. Its relentless climb, dominating 80 percent of the high-end AI chip market, has not only fueled its own ascent but also propelled Wall Street to record highs this year. Nvidia’s commanding presence now exerts over a 5 percent weightage on the benchmark S&P 500 index.
Nvidia’s remarkable surge of 95 percent this year, alongside Meta Platforms’ substantial 46.6 percent increase, surpasses the growth of other members of the “Magnificent 7,” highlighting investors’ insatiable hunger for AI-related assets.
Richard Meckler, a partner at Cherry Lane Investments, underscores, “Nvidia’s rally reflects the incredibly robust fundamentals underpinning its current business model.” He highlights the widespread speculative interest from long option Buyers who have been attracted to the stock amid its upward trajectory throughout 2024, as stated by CNBC.
Amid challenges in iPhone sales, Apple ceded its position as the most valuable U.S. company to Microsoft in January, while Nvidia displaced Tesla as Wall Street’s most traded stock by value in recent weeks.
Although it has been performing strongly, Nvidia’s stock may be nearing its peak. Analysts’ median target price over the next 12 months suggests a valuation of $850 per share, which is below the last closing price of $926. In a CNBC report, David Wagner, portfolio manager at Aptus Capital Advisors, underscores Nvidia’s relatively lower forward price-to-earnings ratio, implying that it is “the most economical choice among the ‘AI narrative’ stocks.”
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During a recent economic forum at Stanford University, Nvidia’s CEO Jensen Huang sparked discussion by suggesting that artificial general intelligence (AGI) could emerge within five years, depending on how the objective is defined. Huang’s remarks align with Silicon Valley’s ongoing pursuit to create computers with cognitive abilities resembling those of humans, as reported by Mint earlier.
