For the second time this year, Nvidia has overtaken Apple to become the world’s most valuable publicly traded company. On Tuesday, Nvidia’s market cap soared to $3.43 trillion, surpassing Apple’s $3.4 trillion. Nvidia’s remarkable growth has been driven by the ongoing demand for its high-powered graphics processing units (GPUs), which are essential in artificial intelligence (AI) applications.

Investors are particularly confident in Nvidia’s positioning within the AI realm, where it continues to serve as the primary hardware provider.

Nvidia’s GPUs have proven indispensable for powering advanced AI systems, including high-profile models like OpenAI’s ChatGPT, making Nvidia the backbone of many cutting-edge AI applications.

At the same time, the launch of “Apple Intelligence” brings a new focus on edge AI for iPhones, enabling on-device AI processing and reducing dependency on centralized GPU-based servers. Analysts are cautiously optimistic about Apple’s potential in this area, but Nvidia’s exceptional revenue growth continues to capture market attention as the company prepares for its next earnings report on Nov. 20.

Why It Matters: Nvidia’s ascension reflects both the growing importance of AI in the tech industry and investor confidence in the hardware that powers it. The shift also signals potential challenges for Apple as it seeks to diversify its AI strategy amid strong competition.

• AI Growth Spurs Nvidia’s Market Value: Nvidia’s leadership in GPUs has made it a key player in AI-driven tech, sparking tremendous growth as its stock nearly tripled in 2024 alone. This increase has solidified its position as a dominant force in AI hardware and software integration, placing it ahead of long-time frontrunners like Apple.

• Market Demand for Nvidia’s GPUs in Cloud and AI: Companies like Microsoft rely heavily on Nvidia’s GPUs for cloud-based AI, which has increased Nvidia’s market reach. This strong demand from cloud computing providers and AI-focused firms continues to drive Nvidia’s revenue growth, doubling and even tripling in recent quarters.

• Apple’s New AI Push with Apple Intelligence: While Apple remains a major player, its “Apple Intelligence” suite, focused on “edge AI,” may be its strongest push into AI innovation. Analysts predict that iPhones equipped with this technology could boost sales, creating competition that does not rely on Nvidia’s GPU-heavy approach.

• Apple’s History of Market Cap Milestones: Apple was the first company to hit $1 trillion and $2 trillion, setting a high bar. Despite Nvidia’s recent gains, Apple’s consistent focus on consumer technology and innovation makes it a close competitor in the AI sector.

Go Deeper -> Nvidia passes Apple as world’s most valuable company – CNBC