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The Stock of Nvidia is Expected to Rise as It Seeks to Become the Third Largest Company in the Country.

June 6, 2024
minute read

Nvidia Corp. recently surpassed Apple Inc. and now has only one company left to overtake to become the largest by market capitalization.

During a significant trading session on Wednesday, Nvidia (NVDA) crossed the $3 trillion market-cap milestone and surpassed Apple (AAPL) to become the second-largest U.S. company. Nvidia shares continue to rise, up 1.8% in premarket trading on Thursday, as the company closes in on Microsoft Corp. (MSFT), the current most valuable U.S. company by market cap.

Nvidia ended Wednesday with a market capitalization of $3.01 trillion, while Microsoft finished at $3.15 trillion. If Nvidia's premarket gains persist through the close, its market capitalization would reach nearly $3.07 trillion. Conversely, Microsoft's slight decline in premarket trading would suggest a market cap of around $3.14 trillion if the trend holds.

CFRA analyst Angelo Zino expressed optimism about Nvidia's future, stating in a client note, “As we look ahead, we think [Nvidia] is on pace to become the most valuable company, given the plethora of ways it can monetize AI and our belief that it has the largest addressable market-expansion opportunity across the tech sector.” Zino also predicted that Nvidia “will be the most important company to our civilization over the next decade as the world becomes more AI-driven.”

While other semiconductor companies are also trying to capitalize on artificial-intelligence spending, Nvidia's market-cap dominance highlights its significant lead both in financial gains and Wall Street's perception.

For context, as of Wednesday’s close, Nvidia’s market cap exceeded the combined valuations of the next three largest companies within the iShares Semiconductor ETF: Taiwan Semiconductor Manufacturing Co. Ltd. (2330), Broadcom Inc. (AVGO), and ASML Holding NV (ASML). This comparison is based on data from Dow Jones Market Data.

Additionally, Nvidia's market value was larger than the combined valuations of Broadcom (AVGO), Advanced Micro Devices Inc. (AMD), Qualcomm Inc. (QCOM), Applied Materials Inc. (AMAT), Texas Instruments Inc. (TXN), and Micron Technology Inc. (MU).

Nvidia’s remarkable growth is driven by its strategic focus on artificial intelligence, which positions it uniquely within the tech sector. The company's advancements in AI technology and its applications are viewed as the main catalysts for its financial success and market dominance. This leadership in AI monetization distinguishes Nvidia from its competitors, allowing it to capture a larger share of the expanding market.

Moreover, Nvidia’s robust performance and investor confidence have propelled its stock upward, reinforcing its status as a leader in the semiconductor industry. The company's innovative approach and ability to leverage AI for various applications have solidified its market position, making it a crucial player in the tech landscape.

As Nvidia continues to innovate and expand its market presence, its trajectory suggests that it could soon become the most valuable company in the U.S. The company’s ongoing efforts to monetize AI and explore new market opportunities underscore its potential for sustained growth and influence.

In summary, Nvidia Corp.’s ascent past Apple Inc. to become the second-largest U.S. company by market cap, and its close pursuit of Microsoft Corp., highlights its significant strides in AI and the tech sector. Nvidia's impressive market value, surpassing that of multiple major semiconductor companies combined, reflects its leadership and potential to shape the future of technology and artificial intelligence.

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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