Nvidia made headlines on Wednesday when it briefly surpassed Apple in market cap during intraday trading. This milestone comes as the chipmaker solidifies its position as the primary beneficiary of the artificial intelligence boom. With a market cap of $3.007 trillion, Nvidia is now on track to become the second most valuable U.S. company, overtaking Apple and reaching the $3 trillion market cap milestone.
One of the key factors driving Nvidia's growth is its estimated 80% market share in AI chips for data centers. Major tech companies heavily rely on these chips, which has translated to billions in spending. In the most recent quarter, Nvidia's data center business, including GPU sales, saw a staggering 427% increase in sales, accounting for 86% of the company's overall revenue. Investors are optimistic about the company's continued success, particularly in sales to cloud companies.
In contrast to Nvidia's meteoric rise, Apple has faced challenges in recent months. The tech giant experienced a 4% drop in overall sales and a 10% decline in iPhone sales in its most recent quarterly earnings report. This slowdown has raised questions about demand in China, manufacturing issues, and mixed reviews of its new virtual reality headset, Vision Pro. Apple, once the first company to reach $1 trillion and $2 trillion market caps, has now been surpassed by Microsoft and faces stiff competition from Nvidia in the AI space.
Founded in 1991 as a gaming company, Nvidia has undergone a remarkable evolution in recent years. From selling hardware for 3D computer games to developing AI chips and cloud subscription services, the company has diversified its offerings and expanded its reach. Nvidia's stock has witnessed a staggering 3,290% increase in the past five years, driven by the growth of its AI business. The announcement of a 10-1 stock split in May further solidifies its position in the market.
Nvidia's rise to prominence in the AI industry and its recent milestone of surpassing Apple in market cap underscore the company's impressive growth trajectory. With a dominant market share in AI chips for data centers and a strong track record of innovation, Nvidia is well-positioned for continued success in the competitive tech landscape. Meanwhile, Apple faces strategic challenges and heightened competition, highlighting the dynamic nature of the industry.