Nvidia Corp, whose Tainan-born CEO is today to speak at the informal opening of Computex Taipei, could soon surpass Apple Inc to become the world’s second-most valuable company, as the biggest beneficiary of the surge in adoption of artificial intelligence (AI) applications takes on the iPhone maker that has been the largest Wall Street firm by market value for years.
The reliance of virtually all AI applications such as OpenAI’s ChatGPT on Nvidia’s high-end chips has helped the stock nearly triple in value over the past year to US$2.68 trillion.
In contrast, Apple ceded its No. 1 spot to Microsoft Corp earlier this year as the once high-flying company grapples with weak demand for its iPhones and tough competition in China. It was last valued at US$2.92 trillion.
Photo: Sam Yeh, AFP
“It is certainly notable because Apple has been so dominant for so long, especially on the growth and innovation front. Recently though, Apple’s innovation curve seems to have flattened, showing slower future growth,” Zacks Investment Management client portfolio manager Brian Mulberry said. “On the other hand, Nvidia has been able to catch wave upon wave of growth. Beginning with gaming demand, then crypto and now AI, they have been able to perfectly match innovation with demand and that equals explosive growth.”
The semiconductor company is heavily weighted on the S&P 500 and the NASDAQ and has been pivotal in driving US stocks to record highs. It accounted for more than one-third of the S&P 500’s gains this year.
Nvidia also became the fastest company to grow from US$1 trillion to US$2 trillion this year, zooming past Amazon.com Inc, Google-parent Alphabet Inc and Saudi Aramco.
Since its blowout forecast about a year ago, the company has consistently breezed past Wall Street’s lofty expectations for revenue and profit, with demand for its graphic processors far outstripping supply as Big Tech rushes to embed AI applications.
Sharp increases in analysts’ earnings estimates have resulted in a fall in the stock’s forward earnings valuation, even with the share price racing higher.
It traded at 37 times forward earnings, compared with 48 times earnings a year ago, LSEG Data and Analytics data showed.
Meanwhile, Nvidia CEO Jensen Huang (黃仁勳) is today to speak at the informal opening of Computex Taipei, inaugurating what would be the biggest-ever iteration of Taiwan’s annual electronics showcase event.
His arrival in Taipei, a week ahead of Computex, was greeted with the usual excitement about the homegrown rock star executive.
Huang frequently visits the nation, and this year he would be accompanied by the bosses of almost all the major US chip firms as they race to close the gap on Nvidia in the AI product race.
Fellow Tainan-born executive Lisa Su (蘇姿丰), CEO and chairwoman of Advanced Micro Devices Inc, is to host a keynote at Computex, while Intel Corp CEO Pat Gelsinger, Qualcomm Inc CEO Cristiano Amon and Arm Holdings PLC CEO Rene Haas are all scheduled to speak at the conference, which runs from Tuesday to Friday.
Additional reporting by Bloomberg
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