Today’s News

Nvidia shares reached a record high on Monday, positioning the AI chipmaker to potentially surpass Apple as the world’s most valuable company. The company’s stock rose 2.4%, closing at USD 138.07, as investors continued to bet on strong demand for its current and next-generation AI processors. 

Nvidia Nears Market Cap Milestone Amid Intense AI Competition 

In June, Nvidia briefly held the title of the world’s most valuable company before being overtaken by Microsoft. Currently, Nvidia’s market value stands at USD 3.39 trillion, just behind Apple’s USD 3.52 trillion and ahead of Microsoft’s USD 3.12 trillion. 

Nvidia has been a major beneficiary of the fierce competition among tech giants like Alphabet, Microsoft, and Amazon to dominate the AI space. TD Cowen analysts noted that companies in the AI sector face a “Prisoner’s Dilemma,” where each is driven to invest heavily in AI development due to the potentially devastating consequences of falling behind. 

TD Cowen reaffirmed its USD 165 price target for Nvidia, naming it their “Top Pick,” and highlighted strong demand for the company’s current generation of AI chips. Although production of Nvidia’s upcoming Blackwell chips has been delayed until the fourth quarter, the company downplayed the impact, reporting that customers continue to buy its existing chips. 

In addition to Nvidia’s gains, Apple shares rose nearly 2%, and Microsoft added 0.7%, helping the S&P 500 index climb 0.8% to a record close. Nvidia, Apple, and Microsoft collectively account for about one-fifth of the S&P 500’s weight, significantly influencing the index’s daily performance. 

Taiwan Semiconductor Manufacturing Co, which manufactures Nvidia’s processors, is expected to report a 40% increase in quarterly profit due to the surge in AI chip demand. Analysts project Nvidia’s annual revenue could more than double to nearly USD 126 billion as spending to build AI data centers continues to grow. 

However, despite Nvidia’s rally driving the S&P 500 to record highs, some investors remain cautious, fearing that the current optimism surrounding AI could fade if there are signs of a slowdown in technology investment. 

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