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Key Takeaways
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Nvidia’s market capitalization surpassed Microsoft’s on Monday, making it the second-largest company in the world after Apple.
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The semiconductor company and its partners are seeing robust demand for products that support artificial intelligence (AI).
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Analysts suggested Nvidia shares could still move higher given the strength of AI spending and seasonal tailwinds.
The market cap of Nvidia (NVDA) overtook that of Microsoft (MSFT) on Monday, making it the second-largest company in the world after Apple (AAPL).
Shares of Nvidia rose just over 2% on Monday, bringing the chipmaker’s market cap to $3.13 trillion, ahead of Microsoft’s $3.04 trillion. Super Micro Computer (SMCI), a partner of Nvidia, reported strong shipments of its GPUs, driven by demand for artificial intelligence (AI), sending shares of both companies higher.
Nvidia and Microsoft have been competing with Apple for the top spot in terms of market capitalization in recent months. In June, Nvidia briefly took the crown when it surpassed Microsoft, but Microsoft later reclaimed the title and Apple has since pulled ahead.
Strong AI spending could still send Nvidia shares higher, analysts say
Nvidia’s share price has more than doubled in value since the start of the year as demand for its AI chips soared. Analysts suggested Nvidia shares could still move higher given the strength of AI spending trends and seasonal tailwinds.
Semiconductor companies tend to perform better in the fourth quarter than in the third quarter, with Nvidia “still going to take the lead,” analysts at Melius Research said Monday, adding that “the setup here is still pretty good.”
Melius has a $165 price target on Nvidia, a 29% premium to Monday’s closing price of $127.72. According to Visible Alpha, this compares with an average price target of $152.52.
Read the original article on Investopedia.