Key points:

  • Nvidia shares have nearly tripled in price over the past year.
  • The company is rapidly overtaking Apple in market capitalization and could become the second largest company in the world.
  • Nvidia has consistently exceeded Wall Street’s revenue and earnings expectations.

Nvidia could soon overtake Apple to become the second largest company in the world. This is facilitated by the rapid development of the field of artificial intelligence, where Nvidia confidently demonstrates itself as one of the main players. At the same time, Apple, which dominated Wall Street in terms of market capitalization for many years, is gradually losing its position.

Nvidia wins competition between Apple and Microsoft

In early 2024, Apple, which had dominated the market for many years, lost its dominance to Microsoft as it faced falling demand for iPhones and increased competition in China. Apple’s market capitalization at that time was $2.92 trillion.

At the same time, Nvidia shares have nearly tripled in value over the past year, reaching $2.68 trillion, thanks to the widespread adoption of artificial intelligence applications such as OpenAI’s ChatGPT, which rely heavily on Nvidia’s high-performance chips.

Apple’s dominance in growth and innovation has become commonplace, but the company’s momentum has recently slowed. On the other hand, Nvidia, thanks to its ability to capture new growth trends – from the gaming industry to cryptocurrency and artificial intelligence – skillfully combines innovation with high demand, which is responsible for its rapid growth.

Thus, we see a change of leaders in the market: Apple, which dominated for a long time, is gradually losing ground, and Nvidia, thanks to its flexibility and innovative approach, confidently takes its place.

Nvidia’s continued success

Semiconductor company Nvidia has shown a strong correlation with the S&P 500, with the Nasdaq playing a key role in its rise to all-time highs. In 2024, Nvidia accounted for more than a third of S&P 500 profits.

The company has set a record for fastest growth, moving from $1 trillion to $2 trillion in 2024, ahead of giants such as Amazon, Alphabet (Google’s parent company) and Saudi Aramco.

Throughout the year, Nvidia has consistently exceeded Wall Street’s lofty revenue and profit expectations. This is due to an acute shortage of the company’s GPUs amid growing demand from large technology companies that are actively introducing artificial intelligence applications.

Despite the rapid rise in share prices, forward earnings estimates for Nvidia shares have fallen as analysts sharply raised their earnings forecasts.

Nvidia shares have a forward earnings estimate of 37, down from 48 times a year ago, according to LSEG.