The furor over artificial intelligence has led to Nvidia to catch up with Apple and become the most valuable company in the world. The microprocessor designer has reached new highs ($144.13 per share) by advancing more than 2% on the day, enough to raise its capitalization to $3.53 billion and position itself above Apple’s $3.52 billion. Levels that it lost shortly after in favor of the iPhone manufacturer. This is the second attempt in which Nvidia manages to become the most capitalized company in the world, given that in June it managed to conquer the podium only to lose it a few days later to Microsoft and Apple.
The company has benefited from the rally experienced by technology companies after the publication of the Tesla quarterly accounts and has left behind the doubts expressed by the market for weeks about whether the technology fever is fading. Investors are beginning to distinguish between the wide range of technology companies and focus their bets on everything related to artificial intelligence compared to the rest. The reduction in income forecasts made by ASML set off investors’ alarms, although TSMC’s accounts helped calm nerves and clear up uncertainties.
In its stock market sprint Nvidia has had the support in the last section of Bank of America, which last week raised its target price for the next 12 months to 190 dollars, from the previous 165, given that according to its estimates the company could obtain revenues of 272 billion dollars in 2030 linked to artificial intelligence. Analysts at the American investment bank highlight “confidence in Nvidia’s competitive leadership and generational opportunity.” At the same time, they emphasize “a growing presence of AI in companies, where Nvidia is the chosen partner” and believe that the company is undervalued despite the strong rally it has accumulated in recent years.
Bank of America analysts further estimate that the potential of AI could generate $200 billion in free cash flow for the company over the next two years. He estimates that Nvidia’s valuation in relation to its profits is “convincing” compared to other technology giants.
In the coming weeks Nvidia will have to portray itself to the market in the presentation of its third quarter accounts. Results that will be scrutinized to the millimeter after the company disappointed in August with its future estimates and its problems in the manufacture of the new Blackwell chip, although revenue shot up 122% to $30.04 billion and increased its net profit by 168%, reaching $16,599 million, reaching a new record. At the moment, Nvidia has accumulated a revaluation of 190% so far this year, which exceeds 2,700% in the last five years. According to the Bloomberg Markets Live Pulse survey, 45% of respondents believe Nvidia’s results will push the stock higher, even after the significant gains it has seen thanks to demand for AI.
Demand for the new Blackwell chips is, in the words of Nvidia CEO Jensen Huang, “crazy,” which the company will have to deal with. An optimism that has been enough to boost the stock nearly 20% in the last 30 days compared to Apple’s 1% or Microsoft’s 0.9% and that has led analysts to predict that Nvidia will be the first listed company in reaching 4 billion market capitalization – the previous record of 3 billion was achieved by Apple in 2022. Morgan Stanley estimates that the new chip model will generate $10 billion in additional revenue before the end of this year.
