Investors flocked to Nvidia stock over the past week.
NVIDIA (NVDA -0.09%) The stock has soared in recent years, advancing a whopping 1,900% since the beginning of 2020. The reason is simple. The technology company has established itself as the leading artificial intelligence (AI) chip company, with a market share of 80%. Nvidia's graphics processing units (GPUs) are the fastest around, and companies launching AI projects are rushing to purchase these and other Nvidia AI products and services.
All of this has resulted in huge profit gains for Nvidia, with sales and net income increasing by triple digits quarter after quarter. In the most recent quarter, revenue hit a record $26 billion and the company announced a 10-for-1 stock split. Meanwhile, Nvidia stock continues to rise and even surpassed $1,000. As a result, Nvidia did something it had never done before.
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Nvidia and Apple
This first event has to do with market value. For the first time, Nvidia market capitalization reached 3 trillion dollars, raising it above Apple and make it the second largest company in the US after microsoft. That happened earlier this week, and Nvidia's value has dropped a bit since then, putting it slightly behind Apple again.
NVDA Market Capitalization data for Y Charts
But this movement is not a coincidence. He says something about where Nvidia is today and what may happen in the future. It's part of the overall momentum that has been gathering speed since last year, when Nvidia became a trillion-dollar company. Then, earlier this year, Nvidia's market value hit the $2 trillion mark, and now the company is proving it has what it takes to share the spotlight with stock market giant Apple.
This trend is positive because it has been accompanied by Nvidia's earnings growth and bright long-term forecasts - solid reasons for the market value gains to last.
As mentioned above, Nvidia has become a key player in the AI โโmarket, offering companies tools that could determine whether their AI projects are successful or not. Today, Nvidia's H100 is the best chip on the market, but the company is not resting on its laurels and has instead promised rapid innovation. It is preparing to launch the H200, which nearly doubles the inference performance of the H100, this quarter, and later this year Nvidia will release the long-awaited Blackwell architecture and its best-performing chip yet.
Beyond chips, Nvidia also offers a variety of other tools and services, including an enterprise software platform that streamlines the development of artificial intelligence programs. And Nvidia products and services are available through all public cloud providers, making it easy for any potential customer to access.
Demand for Nvidia products
In more good news, giving us visibility in the coming months, Nvidia says demand for its products is outstripping supply, and the company expects this to continue into the next year. This gives us reason to be optimistic about near-term earnings. And Nvidia's market position, continued innovation, and overall growth forecasts for the AI โโmarket also give us reason to be optimistic about long-term earnings. Analysts expect the AI โโmarket to reach $1 trillion by the end of the decade, so we're in the early days of this growth story.
Excitement for Nvidia June 7 stock split It may have driven the stock higher this week, raising the company's market value. But stock splits are mechanical trades that represent no real catalysts for stock performance, so they won't be a driving force for continued gains. But that's okay, because profits should do that job.
With Nvidia's strong earnings today and the prospect of more of the same in the future, the company can maintain its market value alongside Apple, a company that has also built its reputation on innovation and is a leader. in its field and has delivered long-term earnings growth.
Whether Nvidia's market value stays below $3 trillion and slightly below Apple's or rises, I consider this tech giant one of the fastest-growing companies today, and a solid stock to buy and hold for the long term.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Apple, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
