 "NVIDIA may finally replace Apple as most valuable company thanks to fierce demand for its next AI Chip")
NVIDIA is on the verge of overtaking Apple as the world’s most valuable company, riding the wave of skyrocketing demand for its upcoming AI chip. The company’s shares have been climbing steadily, easing investor worries about production delays and its long-term growth potential.
In October, NVIDA’s stock has surged nearly 14 per cent, including a 2.4 per cent bump on Monday that pushed it to its highest close since June, although it remains shy of its all-time peak. It’s now the second-best performer in the S&P 500 for the year.
This recent surge followed reassurances from NVIDA’s CEO, Jensen Huang, who confirmed that the company’s new Blackwell chip is now in full production. He reportedly remarked that demand for the chip was overwhelming, brushing aside earlier concerns over delays caused by engineering issues.
These delays had led to a selloff earlier, but the market has since bounced back. According to Morgan Stanley analysts, who recently met with NVIDA’s management, orders for Blackwell are already booked up for at least a year, with strong business visibility ahead.
NVIDIA remains a popular investment in the AI sector, particularly as many large companies, such as Microsoft, continue to pour resources into AI. Microsoft, for instance, is expected to increase its capital expenditure by nearly a third in 2025 to an estimated $58 billion.
The excitement around NVIDIA is also being fuelled by broader AI developments. Taiwan Semiconductor Manufacturing Co.’s latest sales figures point to strong AI demand, while OpenAI, fresh off a $157 billion valuation, has launched a new AI model with reasoning abilities. Alphabet is also reportedly working on similar technology. This development has reignited enthusiasm in the market, with reasoning-based AI seen as a huge new opportunity for NVIDIA, as these systems are highly compute-intensive.
Impact Shorts
More ShortsNVIDIA is well-positioned to benefit from AI’s long-term potential. Analysts expect NVIDiA’s revenue to more than double this year and increase by another 44 per cent next year. The company’s valuation, though high, remains reasonable by industry standards, encouraging investors to keep backing it.
In the options market, optimism is also on the rise, with significant purchases of call options. This move indicates that investors are betting on further stock gains ahead of NVIDA’s fourth-quarter earnings report, expected in late February. While the stock may continue to experience some volatility, NVIDA’s ability to execute its product plans should help it sustain healthy growth and maintain its appeal to investors.
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