Nvidia's Record Closing Puts It Close to Apple's Top Value Spot

Shares of Nvidia (NVDA.O) reached a record high at the close of trading on Monday, bringing the renowned AI chipmaker within reach of surpassing Apple (AAPL.O) as the most valuable company in the world.

Driven by investor optimism regarding strong demand for its current and next-generation AI processors, the stock for the Santa Clara, California company increased by 2.4 percent, ending the day at $138.07.

In June, Nvidia had briefly claimed the title of the world's most valuable company but was later overtaken by Microsoft. Since then, these leading tech firms have been competing closely, with their market capitalizations fluctuating together for several months.

Recent stock gains have boosted Nvidia's market value to $3.39 trillion, just under Apple's market cap of $3.52 trillion, while Microsoft stands at approximately $3.12 trillion.

Nvidia has emerged as the prominent winner on Wall Street amid a competitive race involving other tech giants, including Alphabet (GOOGL.O), Microsoft, and Amazon (AMZN.O), all striving to seize control of the rapidly evolving AI technology sector.

According to analysts from TD Cowen, "We believe the major companies in AI … face an investment environment characterized by a Prisoner’s Dilemma — each is individually incentivized to continue spending, as the costs of not doing so are (potentially) devastating."

TD Cowen reiterated its price target for Nvidia at $165, labeling it as their “Top Pick.” They also observed that demand for Nvidia's current generation of AI chips remains robust.

In August, Nvidia confirmed reports about a delay in ramping up production for its upcoming Blackwell chips, now slated for release in the fourth quarter. However, the company downplayed this impact, indicating that demand for existing chips continues to be strong.

As the quarterly reporting season approaches, Apple shares rose nearly 2 percent while Microsoft saw a 0.7 percent increase, contributing to the S&P 500's rise of 0.8 percent to achieve a record high closing.

Nvidia, Apple, and Microsoft collectively account for roughly one-fifth of the S&P 500's overall weight, granting them significant influence over the index's daily performance.

Meanwhile, Taiwan Semiconductor Manufacturing Co (2330.TW), Nvidia’s processor manufacturer, is expected to announce a 40 percent increase in quarterly profit on Thursday as a result of soaring demand.

Analysts forecast that expenditures on developing AI data centers will help Nvidia’s annual revenue more than double, approaching $126 billion, according to LSEG data.

As Nvidia's stock rally continues to drive the S&P 500 to record highs, investors are also concerned that any indications of a slowdown in AI investment could dampen optimism in the tech sector.

Nvidia, Apple, Investors