Nvidia joins Apple and Microsoft in the tight $3 trillion market-cap family. However, there’s one reason why Apple’s position is more stable.
Chip- and CPU-maker Nvidia passed Apple as the world’s second-highest-valued company at over $3 trillion in total market capitalization. Nvidia is one of the companies spearheading the AI revolution, outpacing competitors like Intel and AMD.
Microsoft is the only other company with a higher market cap than Nvidia, sitting at $3.15 trillion in total market capitalization. Microsoft is also a major player in the artificial intelligence sector, acquiring ChatGPT’s founder OpenAI in a $10 billion bid. Since then, Microsoft integrated generative AI in its search engine, Office package, and cloud services.
Unlike Microsoft, Nvidia uses a business-to-business strategy, offering crucial computing power in the form of powerful microchips. Nvidia does not disclose its prices, but rumors say its most powerful AI chip retails at over $30,000 apiece.
Exploiting its first-mover advantage, Nvidia experienced unprecedented levels of growth. Nvidia’s stock price rose by 3,450% in 5 years, jumping over 160% in 2024 alone. At the moment, one Nvidia share sells at $1,144.80.
Nvidia’s CEO Jensen Huang announced a share split, increasing the number of stocks 10-fold and thereby reducing its nominal value by the same amount. This will make the Nvidia stock more affordable for small-time investors, introducing a flood of new willing buyers and increasing its value even more.
Nvidia vs Apple
At the beginning of 2024, Apple was the highest-valued company in the world. It was the only publicly traded company at over $3 trillion in market capitalization.
But Apple seemingly remained behind the AI revolution, failing to implement the technology into its precious hardware. Investors and fans await anxiously for an announcement in that direction during the 2024 Apple Worldwide Developers Conference between June 10-14.
Apple’s stock remained relatively stable, gaining only 5.78% year-to-date. The Cupertino company was hit by declining sales in China and two major lawsuits by the US Department of Justice and the European Commission.
Despite this year’s downturn, however, Apple remains far more profitable than Nvidia, even despite declining sales in key markets. In the last quarter, Nvidia made $26 billion in revenues and $14.9 billion in net profits. By comparison, Apple made $90.8 billion in revenues and a whopping $23.6 billion in net profits during the same period.
That means Apple made in net profits almost as much as Nvidia made in revenues last quarter.
Furthermore, Apple is known for its cautious approach to new technologies, usually entering the market with revolutionary products years after the technology was born. The company is probably following the same strategy this time, waiting to see the full potential of AI before taking a decision on its approach.
