Nvidia dethrones Apple as world’s most valuable company
Nvidia has toppled Apple as the world’s most valuable company after Apple signalled to investors that it may never match the profitability of its flagship iPhone in future products.
Chip designer Nvidia hit a market capitalisation of $3.43t (£2.66t) at close yesterday after the stock rose nearly three per cent, nudging Apple’s $3.38t (£2.62t) into second place. Microsoft sits in third place with a market cap of £3.06t (£2.37t).
Nvidia’s rally this year has been fuelled by insatiable demand for its graphics processing units (GPUs), which are necessary for powering AI across sectors, from tech giants to healthcare.
The stock is also up in pre-market trading on the news that Donald Trump has clinched the US presidency.
It comes after Apple’s annual report issued a warning on growth and profit margins.
It said: “New products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins, which can materially adversely impact the company’s business, results of operations and financial condition”.
The report also introduced fresh risk warnings on “geopolitical tensions” as well as safety concerns related to emerging AI features.
While Apple posted a six per cent increase in revenue last quarter, its outlook for the current period fell short of analyst expectations.
The company has been struggling with low demand in China, a headwind that threatens its consumer hardware business, which has long been a cash cow.
Nvidia is due to report third quarter earnings on 20 November. It has projected revenue of around $32.5bn for the third quarter, marginally above analysts’ consensus of $31.77bn, according to LSEG data.
Investors will be scrutinising its results with a highly critical eye as market concerns continue to grow over whether AI growth can validate the astronomical valuations and billions in investment by firms like Nvidia.
The company’s stock took a hit in August despite posting record-breaking revenue of $30bn (£22.7bn) in the second quarter, a 122 per cent jump from the previous year.