Nvidia has momentarily surpassed Apple to become the world's second most valuable publicly traded company.

The company reached this milestone during intraday trading on Wednesday, with Nvidia's market cap peaking at $3.007 trillion, slightly above Apple's valuation of $3.005 trillion. This shift underscores the growing investor enthusiasm for companies at the forefront of the artificial intelligence (AI) revolution.

Nvidia's Market Dominance

Nvidia's increase in market capitalization can be attributed to its leadership position in the AI chip market, estimated to hold 80% of the market.

The company's focus on developing GPUs for data centers has been very profitable. Its data center business brought in $22.6 billion in sales in the last quarter alone, which was 86% of its overall revenue. This is a 427% rise from the previous year, highlighting the growing need for AI capabilities across various sectors.

Strategic Shift to AI

Nvidia has successfully shifted its focus from a gaming hardware manufacturer to an AI technology company.

The firm's strategic pivot has garnered substantial investment, sending its shares up by more than 24% after the company released its first-quarter earnings in May. This growth trajectory has been maintained over the past year, with the stock price rising over 3,290% in the last five years.

"Nvidia's transformation into a leading AI technology company has been a game-changer, attracting massive investments and driving exponential growth."

Comparisons with Apple

While Nvidia has been skyrocketing, Apple has experienced relative stability with a 5% growth this year. The US-based technology firm, which became the first U.S. company to attain a $3 trillion market capitalization in January this year, has faced some difficulties.

These include slowing sales growth, especially in the iPhone segment, which saw a 10% decline compared to the same period last year.

Strategic issues regarding demand in significant regions like China and responses to new products like the Vision Pro virtual reality headset have posed challenges.

Future Prospects

However, Nvidia has been able to expand into Artificial Intelligence and cloud services and increase its market capitalization at a very high rate, hitting notable marks in a very short time.

This aligns with current market trends, where investors are focusing more on companies that are key players in the AI technology space.

Concurrently, Nvidia appears poised for continued growth, especially as it prepares for a 10-1 stock split later this month, which may make its shares more accessible to a broader range of investors.