Nvidia rallies, poised to dethrone Apple as most valuable company

(Reuters) - Shares of Nvidia (NASDAQ:NVDA ) neared record highs on Monday, putting the heavyweight AI chipmaker on the brink of dethroning Apple (NASDAQ:AAPL ) as the world's most valuable company.

With investors betting on strong demand for its next-generation Blackwell AI processors, the Santa Clara, California company's stock climbed 2.8% to $138.57, just short of its intraday record high of $140.76 on June 20.

In June, Nvidia briefly became the world's most valuable company. It was overtaken by Microsoft (NASDAQ:MSFT ), and the tech trio's market capitalizations have been neck-and-neck for several months.

The latest gains lifted Nvidia's market value to $3.4 trillion, just below Apple's $3.5 trillion value and above Microsoft's $3.1 trillion.

Nvidia has been Wall Street's biggest winner from a race between Alphabet (NASDAQ:GOOGL ), Microsoft, Amazon (NASDAQ:AMZN ) and other major tech companies to dominate emerging AI technology.

"We believe the major companies in AI ... face an investment environment characterized by a Prisoner's Dilemma — each is individually incentivized to continue spending, as the costs of not doing so are (potentially) devastating," TD Cowen analysts wrote in a report on Sunday.

TD Cowen reiterated its $165 price target for Nvidia, which it called its "Top Pick".

As investors gear up for quarterly reporting season, Apple rose 1.2% and Microsoft added 0.9%, helping drive the S&P 500 up 0.7% to its own record high.

Taiwan Semiconductor Manufacturing Co, the contract manufacturer that produces Nvidia's processors, is expected to report a 40% leap in quarterly profit on Thursday, thanks to soaring demand.



Analysts expect spending to build out AI data centers will help Nvidia's annual revenue more than double to nearly $126 billion, according to LSEG data.

While Nvidia's rally has lifted the S&P 500 to record highs, investors worry optimism about AI could evaporate if signs emerge of a slowdown in spending on the technology.

Source: Investing.com