Nvidia Approaches Apple in Valuation with Record Close

Nvidia (NVDA.O) shares reached an all-time high on Monday, contributing to speculation that the company may soon surpass Apple (AAPL.O) as the most valuable firm globally.

Driven by investor confidence in the increasing demand for its AI processors—both current and upcoming—Nvidia's stock rose by 2.4 percent, concluding the trading day at $138.07.

In June, Nvidia briefly held the title of the world's most valuable company before being surpassed by Microsoft. The market caps of these tech giants have been closely contested for several months.

As of Monday's close, Nvidia's market capitalization stood at $3.39 trillion, which is notably lower than Apple's $3.52 trillion, but higher than Microsoft's $3.12 trillion.

Nvidia has emerged as a prominent player in the escalating competition among major tech companies like Alphabet (GOOGL.O), Microsoft, and Amazon (AMZN.O) to lead in the burgeoning field of artificial intelligence technology.

In a report released on Sunday, analysts from TD Cowen highlighted the intense investment climate within the AI sector, referring to it as a "Prisoner’s Dilemma." They suggested that major AI firms feel compelled to continue investing heavily, as the risk of not doing so might be detrimental.

TD Cowen reaffirmed a $165 price target for Nvidia, designating it as their "Top Pick." They indicated that the demand for Nvidia's existing AI chips remains robust.

In August, Nvidia acknowledged delays in ramping up production of its anticipated Blackwell chips, now expected in the fourth quarter. However, the company minimized potential impacts, noting strong sales for its current chips.

The stock movements came as investors prepared for the upcoming quarterly reporting season. Apple increased by almost 2 percent and Microsoft saw a gain of 0.7 percent, contributing to a 0.8 percent rise in the S&P 500 (.SPX), which also reached a record close.

Furthermore, Nvidia, Apple, and Microsoft together represent about one-fifth of the S&P 500's overall weight, making their stock performance critical to the index's daily fluctuations.

This week, Taiwan Semiconductor Manufacturing Co (2330.TW), the contract manufacturer of Nvidia's processors, is projected to report a remarkable 40 percent increase in quarterly profit, spurred by the high demand for chips.

Analysts anticipate that spending to enhance AI data centers will push Nvidia’s annual revenue to over $126 billion, more than doubling from previous figures, according to LSEG data.

While Nvidia's recent stock rally has bolstered the S&P 500 to new heights, some investors express concerns that enthusiasm surrounding AI technology could diminish if spending signs begin to show a slowdown.

Nvidia, Apple, AI