Nvidia's stock price has hit a historic high, market cap rapidly approaching Apple's, just one step away from becoming the most valuable company in the world.
Nvidia (NVDA.O) stock price hit a record high closing price. The company's stock price rose by 2.4% to reach $138.07, while the Nasdaq Composite Index rose by 0.9%. On Monday, Nvidia's stock price had previously reached as high as $139.60.
Nvidia's previous highest closing price was $135.58, set on June 18 after Nvidia implemented a 10-for-1 stock split, with the intraday high reaching $140.76 two days later.
This chip design company may soon surpass iPhone maker Apple (AAPL.O) to become the world's most valuable company. As of Monday's close, Nvidia's market cap was $3.4 trillion, slightly lower than Apple's $3.5 trillion market cap.
This year, Nvidia's stock price has surged by 179%, benefiting from the surge in demand for artificial intelligence and the company's advanced semiconductors. Meanwhile, the S&P 500 Index and the tech-heavy Nasdaq Index rose by 23% each during the same period. Nvidia's stock price has risen by nearly 14% month-to-date.
In the June quarter, Nvidia reported sales of $30 billion, a 122% year-on-year increase. Although some analysts believe that the hype around AI may be overdone, most analysts remain bullish on the stock. According to FactSet data, out of 65 analysts covering Nvidia, 93% have given a buy or equivalent rating.
When asked whether the current prosperity at Nvidia can be sustained or if it will be like the internet bubble 25 years ago, Nvidia CEO Jensen Huang mentioned that the construction of AI infrastructure is still in its early stages. "The entire computing technology architecture is being reinvented," he said in the BG2Pod podcast released on Sunday, "We have a $1 trillion worth of datacenter that needs modernization."
"The entire computing technology architecture is being reinvented," he said in the BG2Pod podcast released on Sunday, "We have a $1 trillion worth of datacenter that needs modernization."
Huang Renxun also mentioned that the $1 trillion invested in global datacenter infrastructure will eventually shift from traditional central processing units (CPUs) to graphics processing units (GPUs) because GPUs are better suited for the parallel computing required for AI workloads. He added that the industry has already invested about $150 billion in this $1 trillion transformation, and this shift will be completed within the next four to five years.
Analyst Ben Raitz of Melius reiterated a buy rating on the stock earlier on Monday, stating that he still considers Nvidia's $165 target price to be conservative, and believes that Nvidia will maintain its competitive advantage in the long run.
Raitz wrote in the research report, 'Nvidia's greatest achievement is creating an infrastructure that can run on both large-scale cloud computing platforms and small-scale platforms, and can achieve profitability the fastest.'
He also pointed out that Nvidia is a very efficient company, and its profit scale will continue to delight investors. Raitz mentioned that Nvidia's revenue per employee is $4.1 million, while Apple's is $2.3 million, and Meta Platforms (META.O) is $2.4 million.
