Nvidia reaches record highs and wants to replace Apple as the most valuable company in the world

Nvidia stock (NVDA) hit a record closing price as investors continue to bet on the artificial intelligence boom, leaving the chipmaker vying for the top spot as Wall Street's most valuable company.

Shares rose 2.4% to more than $138 on Monday. Nvidia already reached a record closing price of $135.58 in June.

Nvidia shares have risen sharply in October, at one point recording six straight days of gains.

The stock's rise began on October 2 following the announcement of a massive $6.6 billion funding round for ChatGPT maker OpenAI. Much of this funding will go back to Nvidia as OpenAI's growing energy needs require more of its AI chips.

Nvidia shares continued their upward trend, fueled by a wealth of good news for the AI ​​chipmaker. Wall Street analysts reiterated their buy rating on Nvidia shares last week. KeyBanc released a report estimating that Nvidia's revenue from its new Blackwell chips alone will reach $7 billion in the fourth quarter, while demand for its older GPUs “remains extremely robust.” A possible new wave of funding for AI startups would also fill Nvidia's coffers, Wedbush analysts said on Tuesday.

Nvidia also showcased the strength of its software offerings during its AI Summit in Washington, D.C. On the same day, Nvidia and Foxconn announced plans to build Taiwan's largest supercomputer during Foxconn's annual technology showcase event in Taipei. Foxconn also announced details of a mega-factory it is building in Mexico to assemble Nvidia servers with its Grace Blackwell chips, reducing Nvidia's dependence on China amid rising trade tensions.

Nvidia's earnings on Monday also bring the company closer to overtaking Apple as the world's most valuable company. The chipmaker's market capitalization was $3.4 trillion after the market closed on Monday, while Apple's was $3.5 trillion. Apple, Microsoft and Nvidia swapped places among the top three companies last year.

Nvidia's rise more than offset earlier declines following the company's second-quarter earnings release.

Shares fell in late August after Nvidia failed to beat analysts' expectations by as much as investors had hoped. They fell further behind when Bloomberg reported that the company had been subpoenaed by the US Department of Justice in early September, something Nvidia denied. Fears of disrupted demand from China due to rising trade tensions with the US had also driven stocks lower. Nvidia's recent volatility was compounded by its 10-for-1 stock split in June.

More recent positive news from the semiconductor sector could support Nvidia's rise. TSMC (TSM), one of Nvidia's chipmakers, reported revenue that exceeded Wall Street's expectations – another indication that AI demand will remain strong in the near future.

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“AI is trending,” Patrick Moorhead, CEO of Moor Insights and Strategy, told Yahoo Finance, adding: “I see continued growth in the AI ​​data center space over the next 12 months.”

The gains in the chip sector signal that Big Tech's massive spending on AI hardware is far from over, despite Wall Street fears of a slowdown.

Semiconductor industry sales rose 28% in August from a year ago and 15% from July, according to the latest WSTS data reviewed by JPMorgan (JPM). Young Liu, chairman of Nvidia's server maker Foxconn (2354.TW), said in an interview with Bloomberg Television on Tuesday that the company is increasing capacity to meet “crazy” demand for Nvidia AI chips, or GPUs. Nvidia CEO Jensen Huang said in a CNBC interview last week that demand for Nvidia's latest Blackwell chips is “insane.”

Nvidia is scheduled to report earnings on November 19th. Wall Street analysts expect the company to report revenue of $33 billion, up 82% from a year earlier, according to Bloomberg consensus estimates. About 90% of Wall Street analysts covering the stock tracked by Bloomberg recommend buying Nvidia shares.

Laura Bratton is a reporter for Yahoo Finance.

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