The Race to $4 Trillion: Nvidia Takes the Lead
As the tech industry continues to evolve, a new milestone is within reach: a market capitalization of $4 trillion. Currently, Nvidia (NASDAQ: NVDA) is closing in on this threshold, with a market value of around $3.6 trillion. To put this into perspective, it only needs to rise by 11% to surpass this mark.
A Tale of Two Giants
Nvidia and Apple (NASDAQ: AAPL) have taken distinct paths to reach this point. Apple’s growth has been steady, driven by its consumer products, particularly the iPhone. However, this growth has slowed significantly in recent years. On the other hand, Nvidia’s primary product, the graphics processing unit (GPU), has become a top choice for intense calculations, making it an essential component for artificial intelligence (AI) model training.
The AI Boom
The demand for Nvidia GPUs has surged, driven by the need for powerful AI models. This has resulted in a significant increase in revenue, sometimes tripling year over year. As a result, Nvidia’s profit margins have skyrocketed, leading to exponential profit growth.
Sustaining Growth
While Nvidia’s growth is starting to slow, it’s still impressive. The company expects revenue to reach $32.5 billion in the third quarter of fiscal year 2025, indicating 80% revenue growth. This may be a slower pace than previous quarters, but it’s still an 8.3% rise from the previous quarter.
The Path to $4 Trillion
To reach a $4 trillion valuation, Nvidia needs to maintain its growth momentum. With a forward earnings multiple of 51, the stock already has high expectations built into it. If Nvidia meets or exceeds these expectations, it’s likely to cross the $4 trillion mark soon. However, if it misses expectations, the stock could tumble, giving Apple the lead in the race.
A Confident Bet
Based on the language in some of its largest clients’ conference calls, it’s likely that Nvidia will hit expectations. As a result, investors may be safe in betting that Nvidia will reach $4 trillion faster than Apple.
Investing in the Future
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