Chip and semiconductor manufacturing giant NVIDIA Corp (NASDAQ:NVDA) may soon overtake Apple Inc (NASDAQ:AAPL) as the second-most valuable stock globally, riding the artificial intelligence wave to new heights as demand for its chipsets explodes.
Virtually all generative artificial intelligence (GenAI) relies on powerful chips built with semiconductors, sending Nvidia’s stock skyrocketing in the last year or so, tripling it to a market capitalisation of US$2.7 trillion.
A forecast by US research company Gartner has predicted that 80% of companies will use GenAI in their businesses by 2026, up from just 5% last year.
Statista predicts a huge surge in the AI-related semiconductor market, which it expects to reach US$119.4 billion by 2027, accounting for almost 20% of the total semiconductor market.
Apple’s growth falters
Apple, in contrast, has been struggling against headwinds in recent years, with demand for iPhones weakening and strong competition in Chinese markets. The smartphone giant is currently valued at US$2.95 trillion.
"It is certainly notable because Apple has been so dominant for so long, especially on the growth and innovation front. Recently though, Apple's innovation curve seems to have flattened, showing slower future growth," Zacks Investment Management client portfolio manager told Reuters.
"On the other hand, Nvidia has been able to catch wave upon wave of growth. Beginning with gaming demand, then crypto and now AI, they have been able to perfectly match innovation with demand and that equals explosive growth."
Nvidia continues to innovate
Nvidia revealed its next generation of AI chips just last Sunday, revealing the new 'Rubin' chip architecture just months after announcing the 'Blackwell' model, which will ship to customers later this year.
“Today, we’re at the cusp of a major shift in computing,” Nvidia CEO Jensen Huang said on Sunday.
“With our innovations in AI and accelerated computing, we’re pushing the boundaries of what’s possible and driving the next wave of technological advancement.”
Rubin will include a new set of graphic processing units (GPUs) and central processing units (CPUs) as well as networking chips but Nvidia offered few concrete details on the new chip sets.
The new chip platform will be available in 2026 – CEO Huang said the company would now release a new family of AI chips every year, doubling the previous schedule of every two years.
The company’s stock has risen 23.43% over the past month, strongly outpacing Apple’s 4.88% gain in the same period.