Tech giants in the AI race have been spending billions of dollars for GPUs made by Nvidia, considered a leader when it comes to chips that power the technology
AFP

Nvidia beat Apple Tuesday to rise again as the world's most valuable publicly traded company.

Nvidia's shares rose by 2.9%, pushing its market cap to $3.42 trillion, which is past Apple's market cap of $3.38 trillion. Meanwhile, Apple's shares have risen 17% this year, Bloomberg reported.

"Over the past several quarters, it has felt like people basically care about inflation numbers, job numbers, and Nvidia numbers," Fall Ainina, director of research at James Investment Research, told Bloomberg News . "Nvidia overtaking Apple in market cap not only conveys that it is the biggest beneficiary of the AI infrastructure cycle, but it suggests people expect the AI boom will continue."

Nvidia's expansion shows no signs of slowing, as this year the company reported a triple share surge driven by investors' continued confidence in the company's ability to maintain its growth in shareholder value, NBC reported. The combined driving force behind this success is Nvidia's dominant position in the graphics processing unit (GPU) market and its growing footprint in the artificial intelligence sector.

Nvidia's phenomenal growth as a supplier of GPUs is attributed to its collaboration with OpenAI to supply advanced AI software for ChatGPT. Notably, Nvidia recorded an unprecedented stock surge of over 2700% in five years since 2019.

Apple made history by becoming the first to achieve market valuations of $1 trillion and $2 trillion. However, in June, Nvidia briefly surpassed the iPhone maker, only to lose ground over the summer, allowing Apple to reclaim the top rank.

With 7% of the weight of the S&P 500 Index and 25% of its 21% rise this year, Nvidia has become a dominant force in the tech sector. The chipmaker's performance is directly related to the artificial intelligence (AI) goals of the major Wall Street firms, such as Apple, Microsoft, Amazon, Alphabet, and Meta.

Analysts estimate that Nvidia's sales will rise by 44% in the upcoming fiscal year and more than double in the current one, according to Bloomberg data. Wall Street analysts have repeatedly raised their projections of Nvidia's revenues and profits over the past quarter due to this upbeat outlook.