NVIDIA: FRONTRUNNER IN AI SOFTWARE IS NOW THE LARGEST COMPANY IN THE WORLD
Nvidia Corp surpassed Apple Inc on Tuesday to become the largest company in the world, enforcing the importance and influence of artificial intelligence (AI) in Wall Street. The company’s shares rose by 2.9% making it US $139.93, resulting in a market capitalization of US $3.43 trillion. Apple which made a market capitalization of US $3.38 trillion is now in second place.
According to Fall Ainina, director of research at James Investment Research, Nvidia overtaking Apple is proof that it is the biggest beneficiary of AI infrastructure and that the AI wave is here to stay. The software company had previously been crowned the title of largest company in June, but it was only for a day. This time around, the position seems to be Nvidia’s to hold for a considerably longer period.
AI is the driving force behind this phenomenon, as it is not the case only with respect to companies but also this year’s top stock market performers. Nvidia has witnessed a consistent growth rate, and Wall Street analysts have accurately predicted a steady rise in the company’s earnings and profits in the last quarter. Analysts are also optimistic that Nvidia’s revenue will be more than double in this fiscal year. Bloomberg data also suggests that the company will witness an increase of nearly 44% next year.
There was much speculation earlier this year among scholars and researchers that companies might be overplaying their hand with their increased reliance and hope for AI. However, the on-ground situation has proven to be quite the opposite. Along with Nvidia’s increase in valuation, other companies such as OpenAI and Taiwan Semiconductor Manufacturing Co. also reported an increase in demand for AI. OpenAI received a US $157 billion valuation during a recent funding round. This shows that tech companies have full faith in the AI wave and are making the correct bets in order to benefit on a large scale in the coming years. AFP reports claim that Nvidia has received billions of dollars in investment from other major tech giants for this very reason.
OpenAI and Google are reliant on this chipmaker’s technology to train their respective AI generative systems, namely ChatGPT and Gemini. Nvidia is currently worth more than Amazon and Meta combined. Following Nvidia’s model, companies are investing to develop their own AI software systems. Apple recently launched its own small generative model known as Apple Intelligence. Nvidia’s recent success is bound to be a wake-up call for other companies and it is noteworthy that being a frontrunner in the AI game has certainly paid off well and will continue to do so in the future.