Nvidia Approaches Record High, Eyes Apple for Top Spot

Shares of Nvidia (NVDA.O) reached an all-time high on Monday, bringing the AI chipmaker close to surpassing Apple (AAPL.O) as the most valuable company globally.

Investors are optimistic about strong demand for both current and future AI processors offered by the Santa Clara-based company, resulting in a stock increase of 2.4 percent, closing at $138.07.

In June, Nvidia briefly held the title of the world’s most valuable company before being overtaken by Microsoft. The market capitalizations of these tech giants have been closely competing for several months.

Following the recent stock gains, Nvidia's market value rose to $3.39 trillion, putting it just below Apple’s $3.52 trillion and above Microsoft’s value of $3.12 trillion.

Nvidia has emerged as the standout performer on Wall Street amid the race among major tech firms like Alphabet (GOOGL.O), Microsoft, and Amazon (AMZN.O) to lead in AI technology.

Analysts from TD Cowen highlighted an investment environment that resembles a "Prisoner's Dilemma," suggesting that leading AI companies are compelled to continue investing despite the high costs of inaction. They reaffirmed their $165 price target for Nvidia, labeling it their "Top Pick," due to stable demand for its latest AI chips.

Despite reports earlier in August confirming delays in the production of Nvidia's new Blackwell chips until the fourth quarter, the company stated that demand for its existing chips remains strong.

As the earnings reporting season approaches, shares of Apple rose nearly 2 percent, while Microsoft gained 0.7 percent, contributing to a 0.8 percent rise in the S&P 500 index, which also hit a record high.

Nvidia, Apple, and Microsoft combined account for about 20 percent of the S&P 500's total weight, significantly impacting the daily fluctuations of the index.

Additionally, Taiwan Semiconductor Manufacturing Co (2330.TW), which manufactures Nvidia's processors, is expecting to announce a 40 percent increase in quarterly profits due to high demand.

Analysts are forecasting that continuous investments in AI data centers may help Nvidia's annual revenue to more than double, reaching nearly $126 billion, according to data from LSEG.

While Nvidia's recent stock surge is bolstering the S&P 500, there are concerns among investors that enthusiasm for AI might wane if any slowdown in technology spending is observed.

Nvidia, Apple, Stocks