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NVIDIA (NVDA) Overtakes Microsoft as the Most Valued Company
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In a groundbreaking development, NVIDIA Corporation (NVDA - Free Report) has overtaken Microsoft Corporation (MSFT - Free Report) to become the most valuable company in the world. This milestone underscores NVIDIA's robust market position and the burgeoning demand for its innovative technologies.
NVIDIA achieved this milestone in just two weeks after its valuation crossed the $3 trillion mark for the first time ever earlier this month, which aided it in taking the number two spot from Apple Inc. (AAPL - Free Report) . It took NVIDIA just around three months to attain the $3 trillion milestone from the $2 trillion market capitalization as of Mar 1, 2024.
NVDA stock rose 3.5% during yesterday’s intraday trading session and closed at $135.58, reaching its market capitalization of $3.335 trillion. Microsoft slipped to the second position with a market cap of $3.317 trillion, while Apple continues to be in the third spot with a market value of $3.286 trillion.
NVIDIA has witnessed a remarkable run, showcasing a whopping 175.1% surge in its stock price year to date. The stock has outperformed the Zacks Semiconductor – General industry’s year-to-date growth of 118.8%. The surge reflects investors' confidence in NVIDIA's strategic positioning, robust financial performance and pivotal role in shaping transformative technologies like artificial intelligence (AI), gaming and data center solutions.
NVIDIA's impressive stock performance has largely been fueled by expectations that the company will significantly benefit from the increasing investments in generative AI. With its leading position in this space and the numerous opportunities generative AI presents, NVIDIA's stock appears set to maintain its momentum throughout the year.
The rising demand for workflow modernization across various industries is anticipated to boost the need for generative AI applications. According to a recent report by Fortune Business Insights, the global generative AI market is projected to reach $967.6 billion by 2032, expanding at a compound annual growth rate (CAGR) of 39.6% from 2024 to 2032.
However, generative AI requires extensive knowledge for content creation and substantial computational power. Consequently, enterprises aiming to develop generative AI-based applications will need to upgrade their existing network infrastructure.
NVIDIA's next-generation chips, known for their high computing power, are likely to become the preferred choice for enterprises. The company's GPUs are already being utilized in AI models, which is broadening NVIDIA's presence in emerging markets such as automotive, healthcare and manufacturing.
The generative AI revolution is expected to generate significant demand for NVIDIA's next-generation, high-computing power chips. Given the rising AI investments in the data center sector, NVIDIA anticipates its second-quarter fiscal 2025 revenues to soar to $28 billion, up from $13.51 billion in the same quarter the previous year.
What Should Investors Do Now?
NVIDIA's robust product portfolio, leadership in AI and relentless innovation present a compelling investment opportunity. It enjoys high market esteem, and astute investors should consider leveraging NVDA's potential for sustained long-term growth.
NVIDIA boasts an impressive long-term expected earnings growth rate of 37.6%, significantly outpacing the Zacks Semiconductor – General industry's growth rate of 18.9%. The company's earnings have consistently exceeded the Zacks Consensus Estimate over the past four quarters, with an average surprise of 18.4%.
Financially, NVIDIA is on solid ground, with ample cash reserves that provide a cushion against market volatility. As of Apr 28, 2024, the company reported cash and cash equivalents of $31.44 billion, up from $25.98 billion on Jan 28, 2024.
However, NVIDIA's stock trades at a one-year forward price-to-sales (P/S) ratio of 25.99, which is significantly higher than the Semiconductor – General industry's forward P/S multiple of 20.80. While this might be perceived as a risk, we believe the premium is warranted due to NVIDIA's consistent financial performance and substantial growth prospects in emerging sectors such as automotive, healthcare and manufacturing.
Additionally, NVIDIA sports a Zacks Rank #1 (Strong Buy) and currently boasts a Growth Score of A, making it a highly attractive investment option, according to Zacks' proprietary methodology.
Image: Bigstock
NVIDIA (NVDA) Overtakes Microsoft as the Most Valued Company
In a groundbreaking development, NVIDIA Corporation (NVDA - Free Report) has overtaken Microsoft Corporation (MSFT - Free Report) to become the most valuable company in the world. This milestone underscores NVIDIA's robust market position and the burgeoning demand for its innovative technologies.
NVIDIA achieved this milestone in just two weeks after its valuation crossed the $3 trillion mark for the first time ever earlier this month, which aided it in taking the number two spot from Apple Inc. (AAPL - Free Report) . It took NVIDIA just around three months to attain the $3 trillion milestone from the $2 trillion market capitalization as of Mar 1, 2024.
NVDA stock rose 3.5% during yesterday’s intraday trading session and closed at $135.58, reaching its market capitalization of $3.335 trillion. Microsoft slipped to the second position with a market cap of $3.317 trillion, while Apple continues to be in the third spot with a market value of $3.286 trillion.
NVIDIA has witnessed a remarkable run, showcasing a whopping 175.1% surge in its stock price year to date. The stock has outperformed the Zacks Semiconductor – General industry’s year-to-date growth of 118.8%. The surge reflects investors' confidence in NVIDIA's strategic positioning, robust financial performance and pivotal role in shaping transformative technologies like artificial intelligence (AI), gaming and data center solutions.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
Will the Momentum Last?
NVIDIA's impressive stock performance has largely been fueled by expectations that the company will significantly benefit from the increasing investments in generative AI. With its leading position in this space and the numerous opportunities generative AI presents, NVIDIA's stock appears set to maintain its momentum throughout the year.
The rising demand for workflow modernization across various industries is anticipated to boost the need for generative AI applications. According to a recent report by Fortune Business Insights, the global generative AI market is projected to reach $967.6 billion by 2032, expanding at a compound annual growth rate (CAGR) of 39.6% from 2024 to 2032.
However, generative AI requires extensive knowledge for content creation and substantial computational power. Consequently, enterprises aiming to develop generative AI-based applications will need to upgrade their existing network infrastructure.
NVIDIA's next-generation chips, known for their high computing power, are likely to become the preferred choice for enterprises. The company's GPUs are already being utilized in AI models, which is broadening NVIDIA's presence in emerging markets such as automotive, healthcare and manufacturing.
The generative AI revolution is expected to generate significant demand for NVIDIA's next-generation, high-computing power chips. Given the rising AI investments in the data center sector, NVIDIA anticipates its second-quarter fiscal 2025 revenues to soar to $28 billion, up from $13.51 billion in the same quarter the previous year.
What Should Investors Do Now?
NVIDIA's robust product portfolio, leadership in AI and relentless innovation present a compelling investment opportunity. It enjoys high market esteem, and astute investors should consider leveraging NVDA's potential for sustained long-term growth.
NVIDIA boasts an impressive long-term expected earnings growth rate of 37.6%, significantly outpacing the Zacks Semiconductor – General industry's growth rate of 18.9%. The company's earnings have consistently exceeded the Zacks Consensus Estimate over the past four quarters, with an average surprise of 18.4%.
Financially, NVIDIA is on solid ground, with ample cash reserves that provide a cushion against market volatility. As of Apr 28, 2024, the company reported cash and cash equivalents of $31.44 billion, up from $25.98 billion on Jan 28, 2024.
However, NVIDIA's stock trades at a one-year forward price-to-sales (P/S) ratio of 25.99, which is significantly higher than the Semiconductor – General industry's forward P/S multiple of 20.80. While this might be perceived as a risk, we believe the premium is warranted due to NVIDIA's consistent financial performance and substantial growth prospects in emerging sectors such as automotive, healthcare and manufacturing.
Additionally, NVIDIA sports a Zacks Rank #1 (Strong Buy) and currently boasts a Growth Score of A, making it a highly attractive investment option, according to Zacks' proprietary methodology.
Another top-ranked stock from the broader technology sector is Datadog, Inc. (DDOG - Free Report) . The stock sports a Zacks Rank #1 and a Growth Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
Currently, the long-term expected earnings growth rate of Datadog is an impressive 9.6%. DDOG stock has declined 4% year to date.