Nvidia shares closed at their highest levels ever on Monday, putting the heavyweight AI chipmaker on the verge of dethroning Apple as the world’s most valuable company.
As investors bet on strong demand for its current and next-generation AI processors, the Santa Clara, California-based company’s stock price rose 2.4% to end the day at $138.07.
In June, Nvidia briefly became the most valuable company in the world. It was overtaken by Microsoft and the tech trio’s market caps have been neck-and-neck for several months.
The latest gains pushed Nvidia’s market value to $3.39 trillion, just below Apple’s $3.52 trillion and above Microsoft’s $3.12 trillion.
Nvidia is Wall Street’s biggest winner in a race among Alphabet, Microsoft, Amazon and other big tech companies to dominate emerging AI technology.
“We believe that the big companies in AI… are facing an investment climate characterized by a Prisoner’s Dilemma – each is individually incentivized to continue spending because the costs of not doing so (potentially) be devastating,” TD Cowen analysts wrote in a report. on Sunday.
TD Cowen reiterated its $165 price target for Nvidia, calling it its “Top Pick,” and said demand for the company’s current generation of AI chips remained strong.
Nvidia confirmed reports in August that an increase in production of its upcoming Blackwell chips had been delayed until the fourth quarter, but downplayed the impact, saying customers were snapping up existing chips.
As investors prepare for quarterly reporting season, Apple rose nearly 2% and Microsoft added 0.7%, sending the S&P 500 up 0.8% to its own record high.
Nvidia, Apple and Microsoft account for about a fifth of the weight of the S&P 500, giving them a major influence on the index’s daily gains and losses.
Taiwan Semiconductor Manufacturing Co, the contract manufacturer that produces Nvidia’s processors, is expected to report a 40% quarterly profit on Thursday, thanks to surging demand.
Analysts expect spending on building out AI data centers to more than double Nvidia’s annual revenue to nearly $126 billion, according to LSEG data.
While Nvidia’s rally has lifted the S&P 500 to record highs, investors are concerned that optimism about AI could evaporate as signs of a slowdown in spending on the technology emerge.
