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Nvidia soars to record highs, eyes top spot by market cap 

June 7, 2024

Key Points: 

  • Nvidia surpasses Amazon and Apple to become the second-largest US company. 
  • Shares of Nvidia close at a record $1,224.40, bringing the company to a market cap of $3.01 trillion. 
  • Elon Musk orders thousands of AI chips from Nvidia, boosting investor confidence. 

This article is a follow-up to: Nvidia nears Apple in market cap as AI dominance drives growth 

The stock price of Nvidia (Symbol: NVDA) has been on an unstoppable ascent, recently reaching record highs and positioning itself as the second-largest US company by market capitalisation.

On February 19, Nvidia surpassed Amazon (Symbol: AMZN), and now, after adding $1.2 trillion in market cap, it has overtaken Apple (Symbol: AAPL) to secure the second spot. As of Wednesday, the share price closed at a record $1,224.40 each, resulting in a market capitalisation of $3.01 trillion.  

SEE: Images above show the NVIDIA rally, as observed on the VT Markets app

Nvidia is now eyeing the top spot, needing to gain approximately $150 billion to surpass Microsoft (Symbol: MSFT). 

AI drives bullish momentum 

The bullish momentum of Nvidia is driven by relentless positive news and increasing demand for its AI chips. Recently, it was reported that Elon Musk has ordered thousands of AI chips from Nvidia, each valued at around $30,000, for use in X (formerly Twitter) and his AI startup, xAI.

This announcement has further fueled optimism in the market, contributing to the remarkable performance of Nvidia. 

Since January 2024, the share price of Nvidia has soared by 154% and has seen an extraordinary 3,700% increase since its low in March 2019. This growth trajectory is representative of its dominant position in the AI and semiconductor markets. 

Market outlook of Nvidia 

The rise of Nvidia reinforces the pivotal role of AI technology in shaping future economic landscapes. As Nvidia continues to innovate and expand its AI capabilities, it sets a benchmark for other tech companies to follow.

Further, positive news such as major orders from high-profile clients, will likely drive short-term gains. The sustainability of such high valuation will depend on the ability of Nvidia to continue innovating and capturing market share in the AI sector.  

However, this rapid ascent also brings caution for overvaluation, especially with the potential for being oversold. Market participants should remain vigilant and consider the broader market conditions and potential risks associated with such high valuations.

Traders may want to consider including Fibonacci retracement levels in technical analysis to keep the risk level manageable. 

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