Nvidia passes Apple in market cap as second-most valuable public U.S. company

Nvidia’s market capitalization surpassed Apple’s on Wednesday, as investors remain optimistic about the chipmaker’s role in the AI boom. It is now the second-most valuable public company after Microsoft.

Nvidia’s market capitalization reached $3 trillion on Wednesday, after shares rose more than 5%. At market close, Nvidia’s market capitalization was $3.019 trillion, compared to Apple’s $2.99 trillion. Microsoft is the most valuable publicly traded company, with a market capitalization of $3.15 trillion as of Wednesday.

Nvidia shares have increased by more than 24% since the company reported first-quarter earnings in May, and they have been on a tear since last year. The company has an estimated 80% market share in AI chips for data centers, which are attracting billions of dollars in investment from major cloud vendors.

Investors are also becoming more confident that Nvidia’s massive growth in sales to a few cloud companies will continue. For the most recent quarter, revenue in its data center business, which includes GPU sales, increased 427% from the previous year to $22.6 billion, accounting for approximately 86% of total sales.

Meanwhile, Apple shares have risen only about 5% this year, as the iPhone maker’s sales growth has slowed in recent months. According to Apple’s most recent quarterly earnings report, overall sales fell 4%, while iPhone sales fell 10% from the previous year. Apple is facing strategic questions and issues regarding demand in China, manufacturing, and mixed reactions to its new virtual reality headset, Vision Pro.

Apple was the first company to have a $1 trillion or $2 trillion market capitalization. It had long been the most valuable company in the United States, but Microsoft surpassed it earlier this year. Microsoft has also benefited from investor demand for artificial intelligence infrastructure.

Nvidia has been a more volatile stock than Apple. Founded in 1991, the company focused primarily on gaming, selling hardware for 3D computer games. Recently, it began selling cryptocurrency mining chips and cloud subscription services.

Nvidia shares have skyrocketed as its AI business has grown, rising more than 3,290% in the last five years. The company announced a 10-for-1 stock split in May.