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Nvidia shares edge higher premarket after AI chipmaker's market cap tops $3 trn

Published 06/06/2024, 05:11 AM
© Reuters

Investing.com -- Shares in Nvidia (NASDAQ:NVDA) ticked higher in premarket trading on Thursday, pointing to an extension to a rally in the prior session that saw the artificial intelligence chip designer top $3 trillion in market capitalization and overtake iPhone-maker Apple (NASDAQ:AAPL) as the world's second most valuable company.   

The California-based firm has been a major beneficiary of a spike in enthusiasm around the applications of AI. Demand for its AI-optimized chips has soared over much of the last year, as more businesses spend heavily to fold the nascent technology into their operations.

In an unexpected move earlier this week, Nvidia unveiled plans for its new "Rubin" chip only months after it announced its most recent launch. The company, which faces intensifying competition from chipmaking rivals like Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) as well as in-house processors made by large cloud computing firms like Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL), said it is targeting a "one-year" cadence of releases.

Nvidia also reported another quarter of bumper earnings in May, including a 262% year-on-year spike in revenue, and revealed a 10-for-one stock split that is set take effect on June 7.

Apple, meanwhile, is expected to announce more details about its plans for AI at its much-anticipated developers conference next week. Compared to many of its Big Tech peers, the group has so far said relatively little about its AI ambitions, although Chief Executive Tim Cook has remarked that the technology represents a "key opportunity."

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