Nvidia overtakes Apple as world’s second-most valuable company after record earnings fueled by AI processor demand, while facing new export control considerations.
Nvidia’s market value eclipsed Apple’s this week after unprecedented AI chip demand propelled quarterly revenue to $26 billion.
Unprecedented AI-Driven Earnings
Nvidia (NVDA.O) reported record quarterly earnings on May 22, 2024, with revenue soaring to $26 billion – a 427% year-over-year surge in data center revenue. The explosive growth stems from global adoption of its H100 and newly launched Blackwell GPUs by tech giants including Amazon, Google, Microsoft, and Meta for AI infrastructure development.
CEO Jensen Huang confirmed at Computex on May 29 that Blackwell chips have begun shipping to cloud providers, highlighting their 30x performance advantage over previous generations. “The Blackwell platform is driving the next industrial revolution,” Huang stated during his Taipei keynote address.
Market Reshuffle and Expansion
Following the earnings report, Nvidia’s market capitalization surged past $2.8 trillion by May 30, overtaking Apple as the world’s second-most valuable company after adding approximately $250 billion in market value. The milestone marks a dramatic shift in the tech hierarchy, with the semiconductor specialist now trailing only Microsoft in valuation.
Concurrently, Dell and Supermicro announced full server integrations of Nvidia’s Blackwell architecture for June shipments, expanding enterprise access to AI acceleration. These partnerships aim to address the soaring demand for turnkey AI systems across industries.
Regulatory Headwinds Emerge
Amid its expansion, Nvidia faces potential new U.S. export restrictions on AI chips to Middle Eastern countries according to Reuters reporting on May 29. While specifics remain undisclosed, such controls could mirror earlier limitations imposed on advanced chip exports to China in October 2022.
The regulatory developments coincide with heightened competition from AMD, which unveiled its Ryzen AI 300 series processors on May 27 targeting edge AI devices with 50 TOPS performance. This positions AMD as the first direct challenger to Nvidia’s near-total dominance in large language model training hardware.
Historical Context of Tech Leadership Shifts
Nvidia’s displacement of Apple recalls similar tectonic shifts in tech leadership over the past decade. Apple itself surpassed Exxon Mobil to become the world’s most valuable company in August 2011, signaling the rising economic primacy of consumer technology over traditional energy resources. That transition heralded a decade where platform companies dominated market valuations.
The current AI infrastructure boom parallels earlier computing inflection points that reshaped industry hierarchies. Intel’s microprocessor dominance in the 1990s established its market leadership until architectural shifts and manufacturing challenges eroded its position. Similarly, Nvidia’s current 98% market share in AI training chips faces pressure from both geopolitical factors and emerging competitors like AMD, whose MI300X processors present the first credible alternative in high-performance AI acceleration.
