Nvidia's Market Value Surges Closer to Apple as Musk's xAI Taps It for World's Most Powerful Supercomputer

$NVIDIA Corp(NVDA)$  's shares surged 7% to a record high on Tuesday, bringing its market value to $2.8 trillion, just $100 billion shy of overtaking $Apple(AAPL)$  's $2.9 trillion valuation. This positions Nvidia close to reshuffling the rankings of Wall Street's biggest companies, with Apple currently second only to $Microsoft(MSFT)$  .

Why Nvidia Is so Valuable

Nvidia's stock soared as it began monetizing its processors for AI applications. GPU sales are rising, with the company projecting a revenue more than doubling this quarter compared to the same period last year.

These sales are driven by numerous tech companies developing AI models and enhancing computing power. Last year, Nvidia's top GPU customers included many well-known firms.

Additionally, Elon Musk's startup, xAI, raised $6 billion, with much of the funds likely to be spent on Nvidia's processing chips. xAI, which aims to develop artificial intelligence, plans to build a supercomputer for its chatbot Grok, potentially partnering with Oracle and using tens of thousands of Nvidia chips. Although xAI was not among Nvidia's top customers in 2023, this news has made investors optimistic about sustained demand for Nvidia's AI chips.

Nvidia's expensive and coveted GPUs are essential for AI firms to train their large language models, and it takes a big cluster of them to do so. Musk needs a cluster to compete in the AI race — and he reportedly told investors that xAI's would be more than four times as large as $Meta Platforms, Inc.(META)$  's.

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