Is Nvidia Poised to Surpass Apple's Market Value by 2025?

Nvidia, the prominent semiconductor company, has seen its stock price soar remarkably over the past year, propelling its market capitalization to a colossal $2.22 trillion, making it the third-largest company on the global stage. It now closely trails Apple, which holds a market value of $2.61 trillion.

Nvidia's Stellar Market Performance

The diverging stock market trajectories of the two tech behemoths in 2024 are noteworthy. Nvidia's shares have burgeoned by an impressive 79% over the year, while Apple's stock has seen a decline of 12%. This tightening gap between their market capitalizations has sparked discussions about whether Nvidia could overtake Apple by 2025.

Growth Potential in AI Chip Market

Driving Nvidia's skyrocketing market cap is its dominance in the rapidly expanding artificial intelligence (AI) chip industry, which is predicted to grow at an annual rate of 38% through the decade. Nvidia's fiscal revenue for 2024 was a towering $60.9 billion, buoyed by its command over the AI data center GPU market, where it boasts an estimated 98% market share. The company's earnings mirrored this success with a 288% increase.

Apple, known primarily for its iPhones that generated more than half of its revenue in the first fiscal quarter of 2024, only managed to see a moderate revenue increase of 2% and a 16% bump in earnings. Its market segments exhibit slower growth rates and more competition than Nvidia's, potentially affecting its future valuation compared to Nvidia's potential in AI.

Projections show Nvidia's revenue hitting nearly $131 billion by fiscal 2026, with the possibility of a market cap reaching $3.27 trillion assuming a sales multiple of 25. Apple's slower growth rates and current sales multiple suggest a potential market cap of $2.9 trillion under the assumption of $413 billion in revenue. Based on these estimates, Nvidia is on track to potentially outgrow Apple's market value by 2025.

Nvidia, Apple, MarketCap