Nvidia Poised to Surpass Apple: The New Titan of Tech
Nvidia could soon surpass Apple to become the world’s second-most valuable company. As the biggest beneficiary of the surge in adoption of AI applications, Nvidia is taking on the iPhone maker, which has been the largest Wall Street firm by market value for years.
The Rise of Nvidia
The reliance of virtually all artificial intelligence applications, such as OpenAI’s ChatGPT, on Nvidia’s high-end chips has propelled the company’s stock to nearly triple in value over the past year, reaching $2.68 trillion. In contrast, Apple ceded its No. 1 spot to Microsoft earlier this year as it grapples with weak demand for its iPhones and tough competition in China. Apple’s last valuation stood at $2.92 trillion. The Nvidia vs Apple market value scenario has become a hot topic among investors and analysts.
“This is notable because Apple has been dominant for a long time, especially on the growth and innovation front. Recently, though, Apple’s innovation curve seems to have flattened, showing slower future growth,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “On the other hand, Nvidia has been able to catch wave upon wave of growth. Beginning with gaming demand, then crypto, and now AI, they have perfectly matched innovation with demand, leading to explosive growth.”
Nvidia’s Growth Trajectory
Nvidia’s impressive growth is heavily weighted on the S&P 500 and the Nasdaq, pivotal in driving US stocks to record highs. It accounted for over a third of the S&P 500’s gains this year. Nvidia also became the fastest company to grow from $1 trillion to $2 trillion in 2024, surpassing Amazon.com, Google-parent Alphabet, and Saudi Aramco. Since its blowout forecast about a year ago, Nvidia has consistently exceeded Wall Street’s lofty expectations for revenue and profit, with demand for its graphic processors far outstripping supply as Big Tech rushes to embed AI applications. The Nvidia vs Apple market value debate highlights Nvidia’s remarkable trajectory and Apple’s current challenges.
Market Sentiment and Financial Performance
Sharp increases in analysts’ earnings estimates have resulted in a fall in the stock’s forward earnings valuation, even with the share price racing higher. It traded at 37 times forward earnings, compared with 48 times earnings a year ago, according to LSEG data.
Nvidia is also popular in the derivatives market. GraniteShares 2x Long NVDA Daily ETF, which tracks twice the daily percentage change in Nvidia, is the largest single-stock ETF. The fund clocked $1 billion in daily turnover for the first time ahead of Nvidia’s results last week. According to Lipper data, its total net assets have hit a record $2.82 billion this week.
Options traders are bullish, as Nvidia’s volumes, particularly for calls, have picked up in recent sessions following the surge in its stock price. Thursday marked the fifth straight session where more than a million Nvidia call options changed hands, the longest such streak in the stock’s history, according to a Reuters analysis of Trade Alert data.
The ongoing Nvidia vs Apple market value comparison underscores the shifting dynamics in the tech industry and points to the broader implications for the stock market and future technological advancements.
Conclusion
Nvidia’s meteoric rise is a testament to its ability to innovate and adapt to changing market demands. With AI applications driving unprecedented demand for its high-end chips, Nvidia is well-positioned to overtake Apple and become the world’s second-most valuable company. As Apple faces challenges in maintaining its growth trajectory, Nvidia’s explosive growth and market dominance make it the new tech titan. Investors and market watchers should keep a close eye on Nvidia as it continues to shape the future of technology and redefine market dynamics.
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