Nvidia on Friday, October 25th, became the most valuable company in the world by shifting Apple from the appropriate position.
The mentioned result was recorded against the background of the rapid growth in the value of Nvidia shares. The corresponding dynamic is associated with a very high level of consumer demand for specialized artificial intelligence chips which are being developed by this company. It is worth noting that Nvidia is one of the main beneficiaries of the so-called artificial intelligence boom. The corresponding process, which is being realized in the global space, began after OpenAI’s ChatGPT debuted in November 2022. This digital product is a chatbot based on artificial intelligence which has significant cognitive abilities that allow it to process large amounts of information and generate original content. Currently, there is also a process of active integration of AI into many workflows. The use of artificial intelligence as a kind of working tool allows companies to increase productivity and efficiency. This means that AI can potentially become a new source of economic growth. Also, among experts in the context of futurological forecasts, it is widely believed that in the course of its technological evolution, artificial intelligence can transform into a new form of consciousness that will surpass the human mind in terms of cognitive abilities and will be able to achieve significant progress in exploring the world as a global space of the being that does not end at the borders of the territory of humankind existence. All impressive prospects need a material base, the main element of which is chips. Against this background, Nvidia’s success is natural.
On Friday, the mentioned company’s market capitalization index briefly reached $3.53 trillion. At the same time, Apple’s equivalent figure was $3.52 trillion. The relevant data were published by LSEG.
Nvidia was last up 2.2%, with a market capitalization of $3.52 trillion. At the same time, Apple’s shares rose 0.9%, valuing this company at $3.54 trillion.
It’s worth mentioning that in June, for a short period, Nvidia was already the most valuable firm in the world. Then the company was displaced from the leadership position by Microsoft and Apple. The market capitalization indicator of the three mentioned technology giants has been neck-and-neck for several months.
Currently, the market value of Microsoft is at $3.2 trillion. On Friday, the securities of this technology giant rose by 1.3%.
Nvidia is currently a leading supplier of processors that are used in artificial intelligence computing. Besides, the company actually became the winner of a kind of race for dominance in the new AI technology. Microsoft, Alphabet, Meta Platforms, and other industry heavyweights also participated in the corresponding competition process.
For about 30 years, Nvidia has been known as a developer of processors for video games. Now the company is also actually the main developer of processors for the artificial intelligence area. Since the beginning of the current month, the value of Nvidia shares has increased by about 18%. It is worth noting separately that this upward dynamic was recorded after OpenAI announced a $6.6 billion funding round.
The value of shares of Nvidia and other semiconductor companies began to show rapid growth on Friday. This tendency is related to the fact that data storage maker Western Digital released information about its profit last quarter. The mentioned indicator exceeded the preliminary expectations of analysts. Against the background of this result, an optimistic attitude towards the prospects for demand for data centers began to increase.
Russ Mould, investment director at AJ Bel, stated that currently, more companies use artificial intelligence as part of solving their everyday tasks. The expert also noted that the demand for chips developed by Nvidia remains strong. Moreover, Russ Mould stated that it is certainly in a sweet spot as long as the United States economic system avoids a big downturn. According to the expert, the companies will continue to make significant financial injections in the capabilities of artificial intelligence, which will form a favorable background for Nvidia.
It is worth noting that the shares of the most popular developer of artificial intelligence chips have been on a growth trajectory since last week. This dynamic is largely because Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract maker of microcircuits, has announced a projected quarterly profit increase of 54%. The corresponding forecast is based on such a fact of market reality as the currently observed growth in consumer demand for artificial intelligence chips. Obviously, these prospects, among other things, generate a kind of image of an optimistic future for Nvidia.
At the same time, Apple’s present position includes negative circumstances. For example, this company is faced with weak consumer demand for its smartphones. In China, iPhone sales fell 0.3% in the third quarter of the current year. It is worth noting that Apple has been facing difficulties in the market of this South Asian country for a long time. In the relevant context, it is worth mentioning that the media reported that in some state organizations and companies supported by the local government, employees are prohibited from using iPhones in the workplace. The journalists also noted the high probability of scaling up the corresponding practice. Moreover, in China, Apple is facing increased competition from local technology companies. In this context, first of all, it is worth mentioning Huawei, whose sales increased by 42% last quarter.
Next week, Apple will release information on its financial performance for the last quarter. LSEG data indicate that the average analyst forecast provides that the revenue of this technology giant for the mentioned period will be fixed at $94.5 billion, which is 5.55% higher than the result of a year ago.
