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NVIDIA replaces Aramco as third most-valuable company

Published 04/03/2024, 14:36
Updated 04/03/2024, 15:06
© Reuters

Investing.com -- Nvidia (NASDAQ:NVDA) has overtaken Saudi Aramco (TADAWUL:2222) in market value, making it the world’s third-most valuable public company after Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).

The company's share price continues to rally as it benefits from the artificial intelligence-fueled demand.

What Does NVIDIA Do?

Nvidia is a prominent semiconductor company that has made significant strides in the realm of artificial intelligence (AI) and the development of specialized computer chips designed for AI applications.

The company has been at the forefront of the surge in AI technology demand, particularly in the field of generative AI.

Its chips have become indispensable for big tech companies in developing chatbots and other AI systems. Nvidia's dominance in the AI chip market has placed the company at the forefront of the industry, with its chips recognized for their high performance, making them sought after for training and deploying AI systems across various industries

Jensen Huang, NVIDIA’s CEO, recently stated that if the artificial general intelligence (AGI) definition is the ability to pass human tests, it could arrive in some capacity in five years."

NVIDIA Stock Forecast

With Nvidia's share price up a further 2.2% premarket Monday, it is gaining further ground.

Citi analysts said last week that they remain "wildly bullish" on semiconductor stocks and they remain long Nvidia shares.

Meanwhile, an analyst at Tigress Financial Partners raised the price target on NVIDIA to $985 in a recent note, maintaining a Buy rating on the stock.

The analyst said NVIDIA "remains at the forefront of the ongoing acceleration and tipping point of AI adoption across all industries and enterprises that will continue to drive significant revenue and cash flow growth and greater shareholder value creation."

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"NVDA’s leadership position in visual data processing, the acceleration of opportunities in AI and deep learning, and ongoing Data Center adoption will continue to drive greater Return on Capital, increasing Economic Profit, and greater shareholder value creation," added the note. "We believe further upside in the shares exists, and our 12-month target price of $985 represents a potential return of over 25% from current levels."

NVIDIA Current Market Cap

While Nvidia's valuation ended Friday’s session at $2.056 trillion, closing above the $2 trillion mark for the first time, the previous third-placed company, Saudi Aramco, saw its valuation dip to $2.023 trillion, according to data from Companies Market Cap.

It is currently behind Apple, which has a $2.774 trillion valuation and Microsoft, which has a $3.087 trillion valuation.

Should Apple and Microsoft Be Worried?

The recent surge in Nvidia's market value, propelling it to the position of the world's third most valuable company, has undoubtedly stirred speculation about how far it could climb.

The NVIDIA surge, driven by robust demand for AI server chips, has positioned the company as a formidable force in the tech industry, potentially posing a competitive challenge to Apple and Microsoft in the AI and chip technology domains.

While not exactly direct competitors, the rise of NVIDIA underscores Apple and Microsoft's need to remain innovative in the face of evolving technological landscapes.

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