Syed Imran Haider 
Nvidia could soon become the second-most valuable company in the world, surpassing Apple Inc. For years, the iPhone maker has held the title of the largest Wall Street firm by market value.
However, the rise in adoption of AI applications has benefitted Nvidia significantly. Therefore, there is a possibility that the company may take the title from Apple.
AI’s impact
Almost all artificial intelligence applications, including OpenAI’s ChatGPT, rely on the high-end chips of Nvidia.
This has helped the stock price of the company almost triple in value in the last year, as it has climbed to $2.68 trillion.
In comparison, earlier this year, Microsoft had overtaken Apple’s No.1 spot. This is because the iPhone maker has been struggling with weak demand for its products and tough competition from China.
The company’s valuation had reached $2.92 trillion. According to experts, this is notable because when it comes to innovation and growth, Apple has been dominant for quite a while.
However, the firm’s innovation curve appears to have flattened recently and this has slowed down future growth.
In comparison, Nvidia has been able to take advantage of a wave of growth. It began with gaming demand, then crypto and now AI has benefitted it.
In fact, the company has seen explosive growth because it has been able to strike a balance between demand and innovation.
The company
The semiconductor firm has played a key role in boosting US stocks to record highs. It is weighted heavily on the Nasdaq and the S&P 500.
More than one-third of gains recorded by the S&P 500 index this year have been due to Nvidia. It has also become the fastest firm to record growth from $1 trillion to $2 trillion this year.
This has seen it surpass Amazon.com, Saudi Aramco and Google’s parent company, Alphabet. A year earlier, the company had made a blowout forecast.
Since then, it has managed to surpass Wall Street’s lofty expectations for profit and revenue. With Big Tech turning towards AI applications, the demand for the firm’s graphic processors has risen.
As a matter of fact, it has actually outstripped supply. The earnings estimates from analysts have risen, but it has led to a fall in the forward earnings value.
The situation
This is despite the rise in the share price. Nvidia has also gained popularity in the derivatives market. Option traders have taken a bullish stance, as Nvidia has seen its volumes rise.
This is apparent in recent sessions after the stock price of the company rose. Last week on Thursday, more than a million Nvidia call options changed hands.
It was the fifth session in the row for this to happen. This is the longest such streak recorded in the history of the stock.
Therefore, there are expectations that the company would continue to see record growth. It would eventually help it surpass Apple as the world’s second-most valuable firm.
