Nvidia is Now the World's Second Most Valuable Company, Surpassing Apple

Nvidia's enormous market value, closing in at $3 trillion, has reportedly made the artificial intelligence chipmaker the second most valuable company in the world, beating iPhone maker Apple.

According to sources, the US chip designer's shares surged roughly 5%, putting its market capitalization ahead of Apple for the first time - closing the day at $3.01 trillion, which is barely higher than Apple's $3 trillion. The iPhone manufacturer lost its position as the most valuable publicly traded corporation to Microsoft earlier this year.

According to CEO Jensen Huang, Nvidia's data center processors fuel AI models that will spark a new "industrial revolution" by revolutionizing global business with productivity-enhancing features.

Investors have flocked to Nvidia's stock as major companies, including Google and Meta, spend billions of dollars on its chips, and there are no indications of stopping in the near future.

AI Chip Wave

Most notably, due to the increased demand for artificial intelligence, memory chips from Micron and SK Hynix are expected to be almost completely sold out for the coming year.

SK Hynix and Micron, two of the world's leading memory chip makers, say that high-bandwidth memory chips will be out of stock in 2024 and 2025.

The need for AI chipsets has enlarged the market for high-end memory chips, benefiting firms such as Samsung Electronics and SK Hynix, the world's top two memory chip producers.

Nvidia presently sources chips from SK Hynix, but the company also considers Samsung a potential supplier.

Large tech companies like Amazon, Google, and Microsoft, which spend billions of dollars training their LLMs to stay competitive, are reportedly driving the demand for AI chips.

Apple's Earnings and Falls

Apple lost the second most valuable spot to Nvidia a month after Apple's recent earnings report showed a revenue drop, fueled mainly by slow iPhone sales.

In a pre-call statement, Apple CEO Tim Cook claimed a new high of $90.8 billion in March quarter services revenue. The company's sales declined 4% annually, yet it beat forecast earnings of $90.1 billion.

Apple also increased its cash dividend to $0.25 per share by 4%. However, iPhone sales declined 10% to $45.96 billion from the previous year, falling short of Wall Street's expectation of $46 billion. According to reports, the board of directors approved a $110 billion stock repurchase.

Apple's iPhone sales dipped in the first quarter, while Huawei gained market share, particularly in China. Last year, Apple eclipsed Samsung as the world's biggest smartphone maker, while Samsung regained the top spot in 2024 with a lesser volume decline.

During the earnings call's Q&A session, Tim Cook and Apple CFO Luca Maestri addressed concerns about the company's performance in China. They acknowledged a drop in demand but cited better-than-expected conditions.

After dropping its electric car project in February, Apple focused on AI research. After reducing divisions, the company laid off employees and discontinued Titan's decade-long autonomous EV initiative. Despite its predicted cost of $10 billion, Apple's decision to abandon Project Titan surprised the public and its employees.