Nvidia's shares rose 2.3 percent in afternoon trading on Wednesday to a record $404, putting the graphic component maker's market capitalization at $248 billion, just above the $246 billion value of Intel, once the world's leading chipmaker.
Apparently, Nvidia's stock has been among Wall Street's strongest performers in recent years as it expanded from its core personal computer chip business into datacenters, automobiles and artificial intelligence. Intel, which for decades has dominated in processors for PCs and servers, has struggled to diversify its business after making critical stumbles in the smartphone revolution.
While Intel's stock has lost almost three percent in 2020, Nvidia's has surged 68 percent. Investors have been betting that the shift to working remotely because of the coronavirus pandemic will continue to fuel fast growth in Nvidia's datacentre business.
Despite Nvidia's meteoric stock rise, its sales remain a fraction of Intel's. Analysts on average see Nvidia's revenue rising 34 percent in its current fiscal year to $14.6 billion, while analysts expect Intel's 2020 revenue to increase 2.5 per cent to $73.8 billion, according to Refinitiv. This seems to suggest that Wall Street's obsession with share prices as a sign of the company's overall health do not match reality much.