TLDR:
- Nvidia’s market cap reached $3.6 trillion, making it the world’s most valuable company
- Stock rose 2.3% on Thursday, with shares at $147.80 in premarket trading Friday
- Company is joining Dow Jones Industrial Average, replacing Intel
- Taiwan Semiconductor Manufacturing reported record October sales ($9.79 billion)
- Two major catalysts ahead: Nov. 20 earnings report and Blackwell architecture launch
Article: Nvidia Corporation has achieved a historic milestone, becoming the first company to reach a market capitalization of $3.6 trillion, surpassing Apple as the world’s most valuable company. The chip maker’s stock closed at a record high on Thursday, rising 2.3%, though it edged down 0.7% to $147.80 in premarket trading on Friday.
The company’s remarkable ascent has been fueled by overwhelming demand for its artificial intelligence processors. Over the past five years, Nvidia’s stock has shown extraordinary growth, climbing approximately 2,700%, with a 190% increase in 2024 alone.
In a move reflecting its growing influence in the technology sector, Nvidia is set to join the Dow Jones Industrial Average, replacing longtime chip maker Intel. While this inclusion may not drive substantial new buying of Nvidia stock, as relatively few funds track the Dow, it symbolizes the company’s dominance in the semiconductor industry.
The company’s success is closely tied to its evolution from a gaming-focused GPU manufacturer to an AI chip powerhouse. Nvidia’s graphics processing units, initially designed for video games, proved ideal for AI tasks such as training and inferencing of models.
Recent financial results underscore the company’s strong market position. Nvidia has reported triple-digit earnings growth in recent quarters, with gross margins expanding beyond 70%, demonstrating its profitability in the AI chip market.
Supply chain indicators also point to robust demand. Taiwan Semiconductor Manufacturing (TSMC), a key Nvidia supplier, reported record October sales of $9.79 billion, representing a 29% increase. TSMC has confirmed plans to double its advanced chip-packaging capacity this year and again in 2025.
The broader AI market is expected to grow from $200 billion to $1 trillion this decade, positioning Nvidia for continued expansion. The company’s upcoming Blackwell architecture launch represents another potential growth catalyst, with billions in revenue expected during its initial quarter.
Nvidia has already begun production ramp-up for Blackwell in the fourth quarter, with demand reportedly exceeding supply. This suggests sustained strong customer interest in the company’s AI solutions.
To make its stock more accessible to a broader range of investors, Nvidia implemented a 10-for-1 stock split in early June. Since the split, shares have gained approximately 20%.
The company continues to strengthen its leadership team, recently appointing Ellen Ochoa, former director of NASA’s Johnson Space Center, to its board of directors.
Looking ahead, Nvidia faces its next major test with its November 20 earnings report. The company has projected double-digit revenue growth for the quarter, though at a more moderate pace than recent periods due to increasingly challenging year-over-year comparisons.
Among other industry players, Advanced Micro Devices showed a 0.8% increase, while Broadcom declined 0.2% in premarket trading, highlighting the varying performance across the semiconductor sector.
The company’s current market position builds on quarterly revenue that had already reached $18 billion in the third quarter of last year, setting a high baseline for future growth comparisons.
Nvidia’s push into AI has transformed it from a gaming hardware company into a crucial provider of computing infrastructure for the AI revolution, with its chips powering many of the world’s leading AI applications and services.
The company’s recent market valuation surpassing Apple marks a watershed moment in the technology sector, though maintaining this position will depend on continued execution and market demand for AI computing solutions.
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