Nvidia inches close to dethroning Apple as second-most-valuable company

Nvidia shares: meteoric rise of Nvidia in stock market is positioning semiconductor giant to potentially overtake Apple as world's second-most-valuable company. Investors are flocking to Nvidia, driven by its pivotal role in powering artificial intelligence tools like ChatGPT.

Nvidia's market capitalisation has soared from $1 trillion to over $2 trillion in just nine months, surpassing industry giants such as Amazon.com, Google-parent Alphabet and Saudi Aramco along way.

Currently valued at around $2.38 trillion, Nvidia trails Apple by $230 billion and Microsoft by approximately $645 billion.

Nvidia's dominance in high-end AI chip market, controlling 80 per cent of sector, has been a driving force behind its unprecedented rally. company's staggering 95 per cent surge in shares this year has propelled Wall Street to record levels, with Nvidia boasting a significant 5 per cent weight on benchmark S&P 500 index.

Richard Meckler, a partner at Cherry Lane Investments, attributes Nvidia's rally to its robust business fundamentals and strong speculative support from long option buyers, drawn to its consistent urd trajectory throughout 2024.

Meanwhile, Apple, grappling with slowing iPhone sales, relinquished its title as most valuable US company to Microsoft in January.

In recent weeks, Nvidia has even eclipsed Tesla as Wall Street's most traded stock by value.

Despite Nvidia's impressive run, its 12-month forward price-to-earnings ratio of 36.6 remains relatively conservative compared to or AI-focused stocks. David Wagner, portfolio manr at Aptus Capital Advisors, believes Nvidia is undervalued relative to potential growth of AI industry.

However, re are indications that Nvidia's stock may be nearing a peak. Analysts' median target price over next 12 months suggests Nvidia would trade at $850 per share, below its current closing price of $926.

(With Reuters inputs)