The pecking order in Silicon Valley is experiencing a significant shakeup. Nvidia, the chipmaking giant that has been on a dramatic upsurge ever since AI became mainstream, has once again witnessed a meteoric rise in its market value – one that culminated in Nvidia briefly surpassing Apple, the iconic iPhone maker, to become the world’s second most valuable publicly traded company.

Nvidia’s stock surged by 5.2% on Wednesday, closing at an impressive $1,224.40 per share. This rally pushed the company’s market capitalization to a staggering $3.012 trillion, overtaking Apple’s market value of $3.003 trillion. Nvidia’s shares are currently priced at $1,224.40. This rise marks a pivotal moment since Apple has been a dominant force in Silicon Valley since the introduction of the iPhone in 2007. Meanwhile, Microsoft retained its position as the most valuable company globally, with a market cap of $3.15 trillion after a 1.9% increase in its share price. In similar news, Nvidia also plans to execute a 10-for-1 stock split on June 7th. This strategy aims to make the stock more affordable for individual investors

Nvidia’s extraordinary rise is fueled by the surging demand for its AI processors. These high-performance chips are essential for developing AI technologies, which are being aggressively pursued by major tech firms like Microsoft, Meta Platforms, and Alphabet, who have been betting big on the AI landscape over the past year. Nvidia has seen its stock price increase by an astounding 147% in 2024, driven by the massive demand for its processors. Nvidia’s stock has climbed nearly 30% since May 22, when it released an impressive revenue forecast, and its chips continue to power multiple AI services and capabilities.

For those who need a refresher, Nvidia’s initial focus was in developing graphics processing chips (GPUs) specifically for the gaming industry. However, the company jumped on the AI wagon and positioned itself as a leader in the burgeoning AI revolution – a shift that has yielded rich fruit for the enterprise. Nvidia currently boasts an estimated 80% market share in AI chips for data centers. For the most recent quarter, Nvidia reported a 427% year-over-year increase in its data center business revenue, reaching $22.6 billion, which accounts for 86% of its total sales.

In contrast to Nvidia’s rapid ascent, Apple has experienced slower growth. Apple’s stock has risen by only 5% this year, with recent earnings reports revealing a 4% decline in overall sales and a 10% drop in iPhone sales compared to the previous year. The company faces significant challenges, including fluctuating demand in China, manufacturing issues, and mixed responses to its new virtual reality headset, Vision Pro, and while the shares of the Cupertino-headquartered tech behemoth have witnessed a modest rise this year, it pales in comparison to Nvidia’s explosive growth. Apple’s shares are currently priced at $195.87.