Nvidia (NVDA) is the undisputed leader in the stock market. Shares closed at an all-time high at $148.88, up by 2.25% on Thursday. With a market capitalization of $3.65 trillion, the firm is decidedly worth more than Apple (AAPL) at $3.44 trillion.
Markets responded to the Trump win with a relief rally. Nvidia, Apple, and Microsoft (MSFT) are the three most valuable firms. However, MSFT stock is stuck trading at around the $3 trillion level. Investors are likely betting that Microsoft will not monetize the ChatGPT-powered CoPilot AI fast enough.
Markets rewarded Nvidia investors this year. Shares tripled in value in 2024.
Even battered-up Super Micro Computer (SMCI) joined the AI stock sector rally. It added 12.25% to close at $25.48. In the medium term, bears will likely prevail betting against SMCI stock. They hold a 20.15% short float against the firm. Without an auditor willing to sign off on SMCI’s financial filing, shareholders remain skeptical about the company’s results.
Risks
The AI euphoria may lose momentum if companies realize that chatbots do not achieve higher efficiency or profit margin expansion for their business. Conversely, companies that use AI to produce advertising or write software code inexpensively would benefit.
Amazon (AMZN) is betting heavily on AI. It invested $4 billion in Anthropic last year. It plans to make another multi-billion dollar investment.