According to the Intelligent Financial APP, as of the Tuesday's U.S. stock market close, Nvidia (NVDA.US), the AI chip leader referred to by Goldman Sachs as the “most important stock on Earth,” surpassed the total market capitalization of consumer electronics giant Apple (AAPL.US), claiming the title of the “world's highest market cap company”, highlighting the absolute dominance of the immensely popular investment theme of “artificial intelligence” on Wall Street and global stock markets.

Nvidia recently displaced Intel (INTC.US), successfully joining the Dow Jones Industrial Average, shortly after which its total market cap surpassed Apple, reclaiming the title of the “king of the stock market” after 5 months, witnessing how artificial intelligence reshapes the stock market. Yet, the “Nvidia myth” appears to be far from over! In the eyes of many Wall Street analysts, Nvidia's stock price frenzy shows no signs of stopping.

Nvidia's stock price rose by 2.84% on Tuesday, reaching $139.910, achieving a staggering $3.43 trillion market cap, surpassing Apple's $3.38 trillion total market cap. Another tech giant, Microsoft (MSFT.US), overtaken by Nvidia last month, has a market cap of around $3.06 trillion, leveraging the full integration of OpenAI's large models into flagship software products like Office, Microsoft had long held the title of “world's highest market cap company”.

Nvidia, known as the “charismatic leading male protagonist”.

Nvidia's “godly journey” is like the core male protagonist in charismatic fiction. Since the end of 2022, Nvidia's stock price has skyrocketed by a surprising 850%, from the temporary low point in October 2022, the surge has reached an unbelievable 1000%.

"In recent quarters, people seem to be mainly concerned with inflation data, employment data, and ‘Nvidia data’,” stated Farl Anina, research director at James Investment Research. “Nvidia surpassing Apple in market cap not only indicates it is one of the biggest beneficiaries of the artificial intelligence infrastructure cycle, but also implies the expectation that the AI boom will continue to sweep across the globe."

According to statistics, the chip giant NVIDIA currently accounts for about 7% of the total weight of the S&P 500 index in the US stock market, contributing approximately 25% to the 21% increase in this benchmark index this year. In June, NVIDIA once closed with the title of "the world's largest market cap company" for the first time, when its market cap slightly surpassed the tech giant Microsoft, rising to become the world's largest publicly traded company. However, this prestigious title was only held for a day and was later dominated by Apple in the long term. This time, NVIDIA first surpassed Microsoft, shortly after surpassed Apple, and once again won the title of "world's number one".

In the US stock market, including NVIDIA, the seven major tech giants (the Magnificent Seven), the 'artificial intelligence content' is growing. The seven major US tech giants that dominate the S&P 500 index and the high-weighted Nasdaq, known as the 'Magnificent Seven', include: NVIDIA, Apple, Microsoft, Google, Amazon, Meta Platforms, and Tesla.

Apple recently launched the AI smart phone iPhone 16 series, which may lead a new cycle of upgrades for Apple smartphones; Microsoft, Amazon, and Google's parent company, Alphabet, have an increasingly high level of association between their cloud computing business and artificial intelligence; Facebook's parent company, Meta Platforms, with its AI-based digital advertising service tools and Meta AI covering 3 billion users, is leading the global wave of artificial intelligence, approaching ChatGPT in popularity; Tesla, with the FSD fully automatic driving system based on AI supercomputing, is sparking a global trend in autonomous driving.

What's more, except for Apple, these companies are NVIDIA's largest scale customers, and they still emphasize massive spending commitments on artificial intelligence in recent earnings conference calls. Wall Street investment institutions generally believe that NVIDIA will continue to prosper and remain one of the biggest beneficiaries of the global AI trend for some time to come. Among the seven major tech giants, except for the AI chip leader NVIDIA, the other 'six giants' have already announced their financial reports. NVIDIA will release its financial report after the US market closes on November 20th.

NVIDIA is not only the largest company in the artificial intelligence field by market cap, but also one of the best-performing stocks this year. NVIDIA's stock price has risen 183% so far this year, ranking third in the S&P 500 index's performance, following Vistra Corp (VST.US) and data analytics software company Palantir Technologies (PLTR.US). These two companies leading the S&P 500 index are also benefiting greatly from the global frenzy of AI deployment - Vistra largely benefits from the massive demand for electricity brought by the core infrastructure project of AI - data center construction, while Palantir is considered the absolute leader in AI software applications.

Recently, NVIDIA has completely quelled investors' worries about the Blackwell architecture AI GPU being difficult to mass-produce due to chip manufacturing engineering obstacles, and with tech giants showing their determination to continue high spending on artificial intelligence, concerns about NVIDIA's long-term growth prospects have significantly eased, leading to strong stock gains in the near term, helping it to claim the title of 'the world's largest market cap company'.

According to analysts' expected data compiled by institutions, analysts generally expect NVIDIA's revenue scale to more than double this fiscal year, and increase by 44% in the next fiscal year. Wall Street analysts have been continuously raising their revenue and earnings per share expectations for NVIDIA over the past quarter.

In addition to the 'Blackwell optimism' driving bullish sentiment, TSMC (Taiwan Semiconductor), NVIDIA's exclusive AI chip contract manufacturer, recently reported performance showing a 'surge' in global AI chip demand, indirectly boosting NVIDIA's stock price. TSMC executives stated that CoWoS advanced packaging capacity will be unable to meet market demands until 2026. CoWoS S/L/R advanced packaging capacity is crucial for NVIDIA's Blackwell AI GPU and other more extensive AI chip capacities.

The latest round of financing from OpenAI, the developer and leader in the field of generative AI, has raised its valuation to $157 billion, also fueling the continued rise in global artificial intelligence investments. OpenAI recently released an immensely powerful AI model with AI reasoning capabilities, an area Alphabet, Google's parent company, is actively researching. This technological field urgently requires substantial AI reasoning computing power, meaning the demand for NVIDIA AI GPUs is almost limitless.

"Stock market king" NVIDIA's momentum shows no signs of stopping! Next stop, a $5 trillion market value?

"The impact of artificial intelligence can be said to be increasingly significant, with large tech companies globally investing billions of dollars, of which NVIDIA can be said to benefit the most," said Anina from James Investment. "Overall, its prospects are still very optimistic."

Including the 'Big Six' global enterprises, the unstoppable 'cash burning wave' of artificial intelligence remains strong. Stocks closely related to AI chips provide extremely solid logic support, and the rising prices of AI chip leaders like NVIDIA may be far from over. Especially, NVIDIA, the dominant AI chip giant with a market share of 80%-90% in the data center AI chip field, may continue to reach historical highs with a breakthrough of the widely expected $150 price point.

According to the latest forecast data from CitiGroup, by 2025, the data center-related capital expenditures of the four largest tech giants in the USA are expected to grow by at least 40% year on year. These massive capital expenditures are mostly linked to generative artificial intelligence, indicating that the computing power demand for AI applications like ChatGPT remains significant. CitiGroup indicates that this means the spending scale of tech giants on data centers is expected to expand significantly beyond the already robust 2024 spending scale, and this trend is expected to provide very significant positive catalysts for NVIDIA and data center interconnect (DCI) technology providers' stock prices.

Solita Marcelli, Chief Investment Officer of UBS Global Wealth Management in the Americas, predicts that by 2025, the total sales of chip companies closely associated with artificial intelligence will jump from $168 billion this year to $245 billion. AMD CEO Su Zifeng recently stated at a new product launch that the demand for data center AI chips, including AI GPUs, far exceeds expectations. It is also expected that by 2027, the data center AI chip market size will reach $400 billion, and further rise to $500 billion in 2028, indicating that the annual compound growth rate of the global data center AI chip market size from 2023 to 2028 is expected to exceed 60%.

Another Wall Street investment firm, Rosenblatt, has significantly raised its 12-month target price for NVIDIA from $140 to an astonishing $200 per share, ranking as the highest target price for NVIDIA on Wall Street. According to the Rosenblatt chip industry analyst team, with the revenue growth powered by the CUDA-based software, NVIDIA's market value could reach $5 trillion.

The Rosenblatt analysis team states that based on the potential prosperity expected from NVIDIA's software business core around CUDA, even though the stock price of AI chip leader NVIDIA has experienced a period of rapid growth, the stock price of this chip giant is expected to continue to climb in the next 12 months. Therefore, in addition to the substantial GPU revenue generated by binding CUDA to NVIDIA AI GPUs, and the revenue generated from the large-scale utilization of the enterprise-level CUDA platform, the software business derived from the CUDA platform is also an engine for NVIDIA to achieve substantial revenue.

The CUDA ecosystem barrier can be described as Nvidia's "most powerful moat". Nvidia has deeply cultivated the global high-performance computing field for many years, especially its CUDA computing platform created single-handedly that has become popular worldwide, serving as the preferred software-hardware collaborative system for high-performance computing in AI training/inference and other fields. The CUDA acceleration computing ecosystem is an exclusively developed parallel computing acceleration platform and programming assistant software by Nvidia, allowing software developers and engineers to use Nvidia GPU for parallel general-purpose computing acceleration (only supporting Nvidia GPUs, not compatible with mainstream GPUs like AMD or Intel).

CUDA can be said to be a platform that ChatGPT and other generative AI applications rely heavily on for development. Its importance is on par with the NVIDIA AI GPU hardware system, and it is crucial for the development and deployment of large AI models like GPT. With its high level of technological maturity, absolute performance optimization advantage, and extensive ecosystem support, CUDA has become the most commonly used and widely adopted collaborative platform in AI research and commercial deployment.