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Nvidia Surpasses Apple to Become World’s Most Valuable Company Amid AI Chip Demand Surge

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Nvidia briefly overtook Apple as the world’s most valuable company on Friday, fueled by a record-setting rally in its stock, largely driven by demand for its AI-focused chips. Nvidia’s market value briefly hit $3.53 trillion, slightly outpacing Apple’s $3.52 trillion before settling near Apple’s valuation. This is the second time this year that Nvidia has reached the top spot, previously contending with Apple and Microsoft for global market cap dominance.

The Silicon Valley chip giant’s stock has surged about 18% in October alone, spurred in part by OpenAI’s recent $6.6 billion funding announcement, which renewed optimism for AI technology. Nvidia, originally known for gaming processors, is now the preferred supplier of AI chips in a market led by Microsoft, Alphabet, Meta, and other tech titans. This week, further gains were prompted by Western Digital’s strong quarterly performance, indicating strong demand from data centers.

Amid these successes, Apple faces lukewarm iPhone sales, with a slight dip in China as Huawei’s sales grew 42%. Apple’s Q3 revenue is projected to rise 5.5% year over year to $94.5 billion, compared to Nvidia’s anticipated 82% jump to $32.9 billion, reflecting the rapid growth in AI adoption. Nvidia’s shares, now 190% higher this year, have gained significant traction in the options market, with bullish investors banking on sustained AI demand.

Norway’s Sovereign Wealth Fund Posts $138 Billion First-Half Profit Driven by AI-Boosted Tech Stocks

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Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund, reported a staggering first-half profit of 1.48 trillion kroner ($138 billion), thanks to significant returns on technology stocks driven by the rising demand for artificial intelligence (AI) solutions. At the end of June, the fund’s value stood at 17.75 trillion kroner.

The overall return for the fund during the first six months of the year was 8.6%, just slightly below its benchmark index. Nicolai Tangen, CEO of Norges Bank Investment Management (NBIM), highlighted that the strong performance was primarily due to the tech sector’s impressive growth, fueled by AI innovations.

The fund’s equity portfolio saw a robust return of 12.5%, while its fixed income and unlisted real estate portfolios experienced marginal losses. However, the fund reported a negative return of 17.7% on its unlisted renewable energy infrastructure portfolio, impacted by higher capital costs during the first half of the year.

Despite the impressive gains, Tangen cautioned that the stock market’s future performance might not replicate the strong growth seen in recent years, citing increased geopolitical risks and global economic uncertainty.

Established in the 1990s to invest Norway’s oil and gas revenues, the sovereign wealth fund has grown to become one of the world’s largest investors, with stakes in over 8,700 companies across more than 70 countries.

Retail Investors Stay Resilient Amid Market Turmoil, Research Shows

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Despite the recent volatility in U.S. stock markets, retail investors have remained active buyers, taking advantage of sharp declines in popular technology stocks, according to several research reports. While Monday’s global sell-off, driven by anxiety over economic data and the unwinding of yen-funded trades, saw major indexes plummet by 2.6% to 3.4%, individual investors largely continued their dip-buying strategy.

Vanda Research, a New York-based market analysis firm, reported that retail investors remained net buyers during the market downturn, particularly favoring shares of tech giants like Nvidia, Intel, and Advanced Micro Devices. Additionally, they increased their investments in an exchange-traded fund (ETF) that tracks 20-year Treasury bonds, signaling a blend of cautious optimism and a search for safer assets.

“There was no retail capitulation,” noted Marco Iachini, Senior Vice President of Research at Vanda. He emphasized that the data reflected the behavior of self-directed investors who manage their own trading activities without the aid of major brokerage firms or financial advisors. According to Iachini, retail investors are “continuing their dip-buying spree,” undeterred by the market’s turbulence.

Robinhood Markets, a popular trading platform among retail investors, reported a significant influx of new funds during the volatile period. The company saw $1 billion in new cash deposits from retail clients in the first week of August, with $500 million of that amount deposited during Monday’s sell-off alone. This marked a substantial increase compared to the platform’s second-quarter daily average of less than $350 million. However, Robinhood faced challenges in executing orders during overnight sessions due to extreme demand, highlighting the intensity of retail investor activity.

Contrastingly, a report by JP Morgan indicated that retail investors were “aggressive net sellers” on Monday, with the majority of selling pressure occurring during the first hour of trading. Despite this initial wave of selling, both Vanda and JP Morgan observed a strong recovery in retail buying on Tuesday and Wednesday.

As the week progressed, Vanda Research noted a surge in retail interest in the iShares 20+ Year Treasury Bond ETF, making it the second-most actively purchased security by Thursday morning, following Nvidia shares. This trend suggests that while retail investors remain engaged in the stock market, they are increasingly seeking safer havens amid growing concerns about the market’s outlook.

Supporting this cautious sentiment, Alight Solutions, which tracks trading activity in 401(k) retirement accounts, reported that its clients were actively reallocating assets from stock funds to money markets and fixed-income products. According to Rob Austin, Head of Research at Alight, trading activity was about eight times the average, although the overall shift represented just 0.1% of the $200 billion in assets tracked by the firm.