Shares in semiconductor maker Nvidia are soaring, but have they gone too far too fast? Apple, for one, is treading carefully. Matthew Partridge reports
A surge in the share price of Nvidia lifted its market value above $3trn last week, says Martin Strydom in The Times. It briefly overtook Apple to become the world’s second most valuable corporation behind Microsoft. The stock also split ten for one on Friday, which could boost its appeal. Nvidia’s stock has gained 147% in 2024. Mounting demand for artificial intelligence (AI) applications has increased the world’s appetite for its processors as Microsoft, Meta Platforms and Alphabet, Google’s parent company, “race to dominate the emerging technology”.
Don’t assume that Nvidia “will remain a surefire winner on the stockmarket”, says AJ Bell’s Dan Coatsworth. Its “stellar run” demonstrates that investors have already factored in a great deal of positive news. While it is clear that AI “is being embraced” by many sectors, Nvidia “is not the only player in town” with plenty of other companies “upping their game in the fight for a slice of the pie”. Investors will also “need to consider the prospect of tighter regulation and its potential impact when they pay lofty valuations for many industry-leading firms”.
Shares vulnerable to vertigo
Nvidia’s climb “is going to get harder and hit limits, whatever fun speculators have along the way”, says Scott Rosenberg in Axios. If big AI providers “don’t solve the technology’s many problems – from inaccuracies... to uncertain consumer demand and long-term fears of runaway AIs” – then demand for its specialised chips “could soften or vanish, and the AI frenzy would stop dead in its tracks”. Even if this doesn’t happen, the company’s rivals, including Intel, Qualcomm and Apple, have ramped up
