NVIDIA shares closed Monday at a new record high of $138.07 on the Nasdaq index, surpassing the previous June high of $135.58. The 2.4% increase puts the Santa Clara, California-based company close to unseating Apple as the world's most valuable company. This stock has been driven by investor expectations of strong demand for its next-generation artificial intelligence (AI) processors, dubbed Blackwell.
With a market capitalization of $3.39 billion, NVIDIA ranks just below Apple, valued at $3.5 billion, and above Microsoft, which stands at $3.1 billion. In June, it briefly became the world's most valuable company, and has been in close competition with Apple and Microsoft in the stock market ever since.
AI-driven growth
NVIDIA has emerged as a major beneficiary in the tech race for AI dominance, where it competes with giants such as Alphabet, Microsoft and Amazon. As investors gear up for quarterly earnings season, the excitement around AI has boosted other tech stocks as well. Apple rose nearly 2% and Microsoft 0.9%, helping the S&P 500 index reach its own all-time closing high. However, some analysts warn of a possible slowdown in spending on AI technology, which could dampen this optimism.
Still, the recent launch of NVIDIA's Blackwell GPU chips, with initial list prices near $500,000, has been seen as a positive sign by pundits such as Wells Fargo. This high price, 40% higher than previous systems, could alleviate concerns about the company's gross margin.
Competition and prospects
Goldman Sachs analysts also noted NVIDIA's competitive advantage, centered on its strong customer and developer base, which fuels a "virtuous cycle" of continued growth. In addition, NVIDIA innovates not only in chips, but talso in data centers and software, reinforcing its leadership in the industry.
Other AI hardware companies, such as Qualcomm, Broadcom and Micron Technology, have also seen their shares rise, driven by the growing demand for products linked to artificial intelligence. According to Goldman Sachs, global spending on AI will reach$250 billion by 2025, benefiting NVIDIA in particular.