Zahir Kachwala
(Reuters) – Nvidia (NASDAQ:) shares rose about 6% to a record high on Tuesday, leaving the AI chip maker’s market value about $100 billion lower than Apple (NASDAQ:) in a major reshuffling of majors. Wall Street companies. players.
At $1,128 in the latest trading, Nvidia’s market capitalization reached $2.8 trillion, compared to the $2.9 trillion market cap for Apple, which is the second-largest company on Wall Street after Microsoft (NASDAQ:).
Its shares rose as much as 8% during the session to $1,149.39, a record intraday high. Apple shares fell 0.2% in afternoon trading.
Nvidia shares rose nearly 13% after the company last week forecast second-quarter revenue above Wall Street expectations and announced a stock split, encouraging investors who continue to bet on AI.
“The market is struggling to keep up with the company’s ever-improving growth trajectory. With forward earnings multiples in the mid-thirties, it still doesn’t look like bubble territory,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
Nvidia shares recently traded at 36 times forward earnings estimates, compared with 38 for Advanced Micro Devices (NASDAQ:) and 21 for Intel (NASDAQ:), according to LSEG data.
The company’s shares have more than doubled this year after more than tripling last year.
Nvidia, which has been one of the biggest beneficiaries of the artificial intelligence boom, last week reported a five-fold jump in revenue in its data center segment as customers line up for their high-performance chips.
Alphabet (NASDAQ:), Microsoft, Amazon.com (NASDAQ:) and other tech companies are competing for limited supplies of Nvidia’s high-end chips as they seek dominance in AI computing.
“Business is doing incredibly well, there is so much room for further growth, and the AI theme still has legs. When a song is so catchy, investors want to keep humming it all day long,” said Dan Coatsworth, investment analyst at AJ Bell. when asked about the stock’s rise.
Apple shares, long considered a must-own on Wall Street, have lagged other big technology companies in recent months, falling about 2% this year due to weak iPhone demand and fierce competition in China.
Microsoft overtook Apple as the world’s most valuable company earlier this year, outpacing other tech companies thanks to gains from early investments in artificial intelligence in its cloud services.
Microsoft shares fell 0.4% on Tuesday, giving the company a market value of $3.1 trillion.
Apple has also been slower to adopt generative artificial intelligence, which can generate human-like responses to written queries, than rivals such as Microsoft and Google, which are incorporating them into their products.