(Bloomberg) — Nvidia Corp. became the world’s largest company on Tuesday, surpassing Apple Inc. and underscoring how dominant artificial intelligence has become on Wall Street.
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Shares rose 2.9% to $139.93, resulting in a market capitalization of $3.43 billion, ahead of Apple at $3.38 billion. Microsoft Corp., which Nvidia adopted last month, has a market cap of $3.06 trillion. Nvidia has soared by more than 850% since the end of 2022.
“Over the last few quarters, it felt like people mainly cared about inflation numbers, jobs numbers and Nvidia numbers,” said Fall Ainina, research director at James Investment Research. “Nvidia surpassing Apple in terms of market cap not only means it is the biggest beneficiary of the AI infrastructure cycle, but it suggests people expect the AI boom to continue .”
The chipmaker makes up 7% of the weight of the S&P 500 index and is responsible for about a quarter of the benchmark index’s 21% gain this year. Nvidia had already closed with the title of largest company in June, although it only held the record for one day.
The biggest companies on Wall Street are all heavily exposed to artificial intelligence: Apple with its new AI iPhones; Microsoft, Amazon.com Inc. and Alphabet Inc. with their cloud businesses and AI services; and AI capabilities and ad targeting from Meta Platforms Inc. With the exception of Apple, these companies are all among Nvidia’s biggest customers and have outlined their commitment to continuing to invest in AI.
Last week, Apple’s results highlighted concerns about its revenue growth, as well as weakness in China. Nvidia will report later this month.
Not only are the largest companies by market cap playing a role in AI, but so are the best performing stocks of the year. Nvidia’s 183% advance is the third largest in the S&P 500 this year, behind Vistra Corp. – the power producer that has seen a surge in AI-related demand – and data analytics software company Palantir Technologies Inc.
The recent strength came as the company eased investor concerns about issues with its Blackwell chip, which was delayed due to technical issues, as well as its long-term growth prospects.
Analysts expect Nvidia’s revenue to more than double in the current fiscal year and rise another 44% in the next, according to data compiled by Bloomberg. Wall Street analysts have continually raised their earnings and earnings estimates for Nvidia over the past quarter.