Nvidia's stock surged to new heights on Monday, closing at its highest value ever and edging the AI chip giant closer to dethroning Apple as the world's most valuable company. Fueled by investor confidence in its AI processors, Nvidia's shares rose by 2.4%, closing the day at $138.07. 

With a market value now standing at $3.39 trillion, Nvidia is within striking distance of Apple's $3.52 trillion valuation, while Microsoft, at $3.12 trillion, rounds out the trio of tech titans vying for the top spot.

Nvidia has been Wall Street's standout winner in the global race for dominance in artificial intelligence (AI). As major tech companies like Alphabet, Microsoft, and Amazon pour resources into AI, Nvidia's powerful graphics processing units (GPUs), essential for training AI models, have made the company a cornerstone in the AI revolution.

"Each company is incentivised to continue spending heavily on AI, as not doing so could have disastrous consequences," according to analysts at TD Cowen, as per a recent Reuters report. This competitive pressure has created a boom in demand for Nvidia's AI chips, which are crucial for powering AI applications and dacentresers. TD Cowen recently reiterated its $165 price target for Nvidia, highlighting the company as its "top pick" due to the sustained high demand for its current generation of chips.

In August, Nvidia confirmed that the production of its next-generation AI chips, codenamed Blackwell, had been delayed to the fourth quarter of the year. However, the company reassured investors that this would not impact its short-term performance, as demand for its existing processors remains exceptionally strong. This demand, paired with Nvidia's market dominance in AI hardware, has pushed its stock price upward despite the delay, suggests the Reuters report.

Taiwan Semiconductor Manufacturing Co. (TSMC), the company responsible for producing Nvidia's chips, is also expected to post a 40% jump in profits this quarter.

Nvidia briefly became the world's most valuable company in June, before being overtaken by Microsoft and subsequently Apple. Now, with its stock climbing to new records, Nvidia is once again on the cusp of regaining the title.