Nvidia Surpasses Apple as World's Most Valuable Company Amid AI Boom

Prediction: Nvidia Will Soar in 2025 Thanks to This 1 Thing | The Motley Fool

Nvidia (NVDA -16.97%) roared higher last year, gaining more than 170%, and emerged as the key player in the artificial intelligence (AI) boom. This is because the tech giant sells the world's top performing AI chips as well as a wide range of related products and services to accompany customers throughout their AI stories. Nvidia chief Jensen Huang even called the company the "on-ramp" to AI during an interview a few months ago on the BG2Pod podcast. All of this is a particularly big deal considering the potential of AI to revolutionize many industries and supercharge the earnings of companies involved in the development of AI and those that use AI to improve their businesses. Today's $200 billion AI market is forecast to reach more than $1 trillion by the end of the decade. Nvidia is well positioned to benefit over the long term and in the near term. In fact, my prediction is this hot stock won't take a pause this year and instead will soar in 2025 -- thanks to this one thing. Let's check it out. First, though, it's important to address news that hurt Nvidia stock early this week. Chinese startup DeepSeek launched a large language model, saying development took only two months and at a price tag of less than $6 million. This weighed on AI stocks, including Nvidia, as it called into question the massive investments poured into the technology. The concern was U.S. AI customers, seeing DeepSeek successfully train its LLM with less powerful chips, may think twice before buying Nvidia's most expensive GPUs. But it's also possible that just the opposite will happen, and with this advance by DeepSeek, U.S. companies will truly commit to using the top GPUs to ensure their leadership. In any case, I don't see this news as something that will hurt Nvidia's growth prospects. Now, let's take a quick look at the path Nvidia has traveled so far. This tech giant started out as a designer of graphics processing units (GPUs) that mainly served the video games industry. But the GPU's ability to process multiple tasks at once made it a great tool for many other sectors -- so Nvidia created a parallel computing platform, CUDA, that helped the GPU's usage explode across the marketplace. And as the AI boom gained momentum, it was clear Nvidia's GPUs would play a major role. The company's earnings reports confirmed this, as revenue climbed quarter after quarter in recent years in the double- and triple-digits to reach records well into the billions of dollars. In the most recent quarter, Nvidia reported revenue of more than $35 billion. Importantly, Nvidia not only has generated revenue growth, but this is coupled with extremely strong profitability on sales -- gross margin has remained above 70% over the past year. Now, let's move along to my prediction. Some investors have worried that after Nvidia's stellar stock performance over the past two years -- gaining 800% over that period -- the stock may be due for a pause. And that could have been the scenario if Nvidia rested on its laurels and just continued selling its current products. But Nvidia isn't standing still. This market powerhouse is launching its new Blackwell architecture right now and next-generation architecture, Rubin, may not be far behind. News reports, including one in Taiwan Economic Daily, suggest the Rubin release might happen by the middle of this year -- sooner than expected as it was originally planned for 2026. My prediction is this innovation -- these two launches -- will push Nvidia stock higher this year. For a couple of reasons. Such major product releases show that Huang was serious when he said the company would update its GPUs on an annual basis and could turn this promise into a reality. Annual updates make it very difficult for rivals to catch up and unseat Nvidia, and this offers us reason to be confident about growth over the long term. The release of two major products this year also will produce something concrete that we can see right away, and that's revenue. The company already said Blackwell will generate several billion dollars in revenue in the fiscal fourth quarter -- a period that closes at the end of this month -- and gross margin will remain above 70%. So Nvidia's new releases may boost revenue right away, and at a high level of profitability. If upcoming earnings reports confirm this, investors could continue piling into this top player. Finally, trading at 40 times forward earnings estimates, Nvidia isn't dirt cheap, but it does have room to run -- especially in light of its growth and profitability profile. Considering all of this, my prediction is Nvidia's top performance won't stop here and should continue in 2025. And the good news is, even if I'm wrong about that, this market leader still has what it takes to potentially supercharge your portfolio over time.

Nvidia Was One of the Largest Companies by Market Cap in 2024. Will It Continue to Succeed in 2025? | The Motley Fool

Nvidia (NVDA -3.12%), a leading semiconductor company, has seen its share price soar 500% over the past three years, pushing its market cap up to a staggering $3.6 trillion. While Apple was the largest company by market cap earlier this year, as I write this, Nvidia holds the spot. Nvidia's rise has been fueled by its lead in the artificial intelligence processor market, but can Nvidia keep the good times going this year? I think so, and here's why. To understand why Nvidia can continue to reign in 2025, we first need to understand why it became a must-have AI stock. Nvidia's graphics processing units (GPUs) were used by tech companies for years as they developed artificial intelligence systems. That was before OpenAI released ChatGPT in late 2022, which sparked an AI race. Nvidia's early lead in AI has now given the company a nearly uncrossable moat for artificial intelligence processors. Nvidia has an estimated 70% to 95% share of the AI processing market, leaving rivals Intel and AMD far behind. And there's no sign that Nvidia is slowing its AI processor innovation pace. The company released its new Blackwell chip last year and said shortly thereafter that demand was already outstripping supply. Nvidia CFO Colette Kress said on the company's third-quarter earnings call that "Blackwell demand is staggering, and we are racing to scale supply to meet the incredible demand customers are placing on us." Morgan Stanley estimates that Nvidia will ship between 60,000 and 70,000 Blackwell B200 servers this year, with a price tag between $2 million and $3 million for each one. The point here isn't to nail down Nvidia's expected revenue perfectly, but the Morgan Stanley estimates -- combined with Nvidia's comments about demand -- show just how much potential the company has in AI processors for this year. AI has been a dominant storyline in the tech space for a few years now, which might make it seem to some as if the time to invest has already passed. But AI's growth, and Nvidia's potential to benefit, likely aren't fully tapped out. For example, the Trump administration recently announced $100 billion in data center spending led by Softbank, Oracle, and OpenAI. The AI infrastructure spending could be worth up to $500 billion over the next four years. This investment could spur more growth for Nvidia as the company meets the demand for AI processors. Nvidia CEO Jensen Huang has been clear about his belief that data center spending is already accelerating, saying last year that infrastructure spending could double to $2 trillion over the next five years. Even with Nvidia's massive share price gains over the past few years, I think there's still a case for buying the company's stock. We're still in the early innings of AI, and tech companies are just beginning to ramp up data center spending to keep up with each other. Nvidia's shares have a forward price-to-earnings ratio of 32 right now, which is only slightly more expensive than the tech-focused Nasdaq-100's forward P/E of 26. While not exactly cheap, buying Nvidia's shares now allows investors to tap into one of the leading AI companies as this market continues to take shape. Just in keep in mind that there could be more volatility on the way if certain AI investments don't pan out or if government restrictions are placed on AI developments.

Nvidia Stock Is Up Over 900% Since 2023. Here's Why It's Still a Screaming Buy.

Since the start of 2023, Nvidia's (NVDA -3.12%) stock has gained an astronomical 906% as of the time of writing. It's also right around its all-time high right now, but these two facts may scare some investors off. The common thought is, "Nvidia has risen so much already; how can it increase more?" This behavior is known as "price anchoring," and it occurs when investors "anchor" their thoughts to a previous price, and when the stock rises, they now deem it to be expensive. While this is common investor thinking, it's caused many (including myself) to miss a large chunk of Nvidia's rise. However, I'd argue Nvidia isn't all that expensive of a stock right now, especially when compared to its peers. Although you may have missed part of its rise, there is still plenty of room to run. Nvidia is poised for strong growth again in 2025 Nvidia's success can be tied directly to one movement: artificial intelligence (AI). Nvidia has benefited from this trend because big AI spenders have loaded their computing servers with industry-leading Nvidia GPUs. GPUs are a fantastic pick for this type of computing because they can process multiple calculations in parallel. They can also be connected in clusters to multiply this effect, and it's not uncommon to see servers with more than 10,000 GPUs doing AI model training for the AI hyperscalers. Although the initial stages of the AI computing buildout were massive, companies are planning on spending more this year. All of the cloud computing platforms have told investors that capex will rise in 2025 -- a similar message that AI hyperscaler Meta Platforms portrayed during its Q3 earnings release. Taiwan Semiconductor, Nvidia's chip manufacturer, also forecasted that AI-related chips would double their revenue in 2025, another clear indication that Nvidia's growth is far from over. Lastly, let's look at what Wall Street analysts expect from Nvidia. For FY 2026 (ending January 2026), an average of 60 analysts expect Nvidia to produce revenue of $196 billion -- up 52% from where they think FY 2025 will end. That level of growth is unprecedented for a company of Nvidia's size and also indicates that the Nvidia growth story is far from over. Nvidia is slated to have a monster 2025, but the stock isn't trading at high levels in preparation for it. Nvidia isn't as expensive as you might think Because Nvidia is expected to grow so much over the next year, using a trailing earnings metric can be problematic. So, I'll use a forward-looking measure to assess Nvidia's valuation. At today's prices, if Nvidia hits all of the targets analysts have set, it will trade for 33 times earnings at the end of FY 2026. In other words, it will trade for 33 times 2026 projected earnings. However, if Nvidia keeps up its strong growth rates, it's unlikely to drop to a valuation level that low. As a result, the stock will likely rise throughout the year, rewarding investors with market-beating returns. Although Nvidia has had a great run over the past two years, I think 2025 will be another strong year for the stock, although it likely won't be as good as 2023 or 2024. Still, there is plenty of growth left in the business, which makes it a solid buy now.

Could Nvidia Unseat Apple as the Largest Company in the World in 2025? | The Motley Fool

Nvidia (NVDA 4.43%) and Apple (AAPL 0.53%) are the two largest companies in the world by market capitalization. While Nvidia is valued at roughly $3.38 trillion as of this writing and stands as the second-biggest business, Apple has a valuation of $3.46 trillion and is at the top of the heap. Notably, both of these tech giants are leaders in different corners of the hardware market. Nvidia is the leading designer of advanced graphics processing units (GPUs) for artificial intelligence (AI) and data center computing. Meanwhile, Apple leads the smartphone market with its iPhone lines and captures the majority of global operating profits from mobile phone sales. As hardware-focused businesses, Apple and Nvidia's position atop the list of the world's most valuable companies looks even more noteworthy because software-focused businesses usually tend to be more profitable. But while Apple should be able to continue commanding very strong margins on its mobile hardware and other offerings in 2025, the stage could be set for Nvidia to deliver superior stock performance and take the title of "world's most valuable company" this year. Nvidia stock has been on an incredible run as rising demand for AI technologies has spurred massive sales and earnings growth for the company. The AI leader's share price rocketed 131.5% higher over the last year, and there were brief periods in 2024 when it had a higher market cap than Apple and stood as the world's largest company. While Nvidia's business has historically been shaped by cyclical demand trends in the semiconductor industry and will face tougher growth comparisons in 2025, its outlook still appears stronger than Apple's. Apple is facing some performance headwinds in China -- its second-largest geographic segment by revenue. The mobile hardware giant hasn't been able to find a suitable Chinese partner to incorporate its Apple Intelligence platform into its latest iPhones. Due to regulations put in place by China's government, many products and services need to have a domestic operational partner in order to be sold in the country. As a result, the iPhone 16s in China do not have the Apple Intelligence platform and are facing a tougher competitive environment because of it. Apple is also facing some regulatory pressures in the domestic market. In March of last year, the U.S. Department of Justice (DOJ) filed an antitrust suit against the company alleging that it has created an illegal monopoly on the smartphone market by tying developers into its ecosystem through contractual restrictions. While it's possible that the DOJ under the new Trump administration will take a comparatively hands-off approach to antitrust matters and other issues compared to operations under the Biden administration, it's not clear the iPhone maker will benefit from this dynamic. Over the trailing-12-month period, Apple posted a gross profit of $180.7 billion on sales of $391 billion -- good for a gross margin of 46.2%. Meanwhile, Nvidia has posted a gross profit of $85.9 billion on sales of $113.3 billion across the same stretch -- representing a gross margin of 75.8%. So while Apple has generated far more overall sales and gross profit over the past year, Nvidia's gross profit margin is far higher. This distinction becomes even more significant when looking at recent sales momentum for both businesses. Nvidia's revenue increased 94% year over year to reach $35.1 billion in its most recently reported quarter (ended Oct. 27, 2024). Earnings per share for the period surged 111% annually to reach $0.78. For comparison, Apple's revenue increased 6% year over year to $94.9 billion -- and its diluted earnings per share rose 12% to hit $1.64. Market data from Counterpoint Research suggests that Apple's iPhone unit shipments fell 5% year over year in the final quarter of 2024, so sales growth will be harder to deliver with its next financial report. In order to return to stronger sales and earnings growth, Apple may need to deliver a new product or a software service offering with a more groundbreaking impact. The company's iPhone lines reliably serve up strong sales and great margins, but the smartphone market is saturated -- and growth has become harder to deliver. In contrast, the demand outlook for Nvidia's GPUs continues to be very strong in 2025 amid ongoing AI infrastructure spending, and the rollout of the company's new Blackwell processors should support strong sales expansion and margins. With that in mind, I think there's a very good chance that Nvidia will take the title of "world's most valuable company" back from Apple and hold on to it for most of this year.

Nvidia surpasses Apple again, regain's most valuable company title By Investing.com

Investing.com -- Nvidia (NASDAQ:NVDA) has once again claimed the title of the world's most valuable publicly-traded company, surpassing Apple (NASDAQ:AAPL) in market value on Tuesday. This marks the third time Nvidia has overtaken Apple, having previously done so in June and November. Nvidia's shares increased by over 1% on Tuesday. So far in 2025, the chipmaker's shares have risen about 4%, following a 171% increase in 2024 and nearly 239% in 2023. This robust growth reflects the strong demand for Nvidia's artificial intelligence (AI) chips. In contrast, Apple's shares fell by 4% on Tuesday, bringing the total decline this year to 12%. Despite a 30% gain in 2024 and the development of its Apple Intelligence suite of AI features for phones and laptops, Apple's business has not benefited from the AI boom to the same extent as Nvidia. Nvidia holds the majority of the market share for graphics processing units (GPUs). These GPUs are crucial for developing and deploying AI software, such as OpenAI's ChatGPT. Although Nvidia's revenue growth has slowed, it nearly doubled to $35.08 billion in the most recent quarter. Apple was the first company to achieve market cap milestones of $1 trillion, $2 trillion, and $3 trillion. As of Tuesday, Nvidia's market cap stands at approximately $3.4 trillion, compared to Apple's $3.3 trillion. Microsoft (NASDAQ:MSFT) trails closely behind with a market cap of $3.2 trillion. Earlier this month, Microsoft, a major customer of Nvidia's GPUs, announced plans to spend $80 billion on AI data centers in fiscal 2025.

Nvidia passes Apple again to become world's most valuable company

Shares of the chipmaker rose over 1% on Tuesday, and shares are up about 4% so far in 2025 after rising 171% in 2024 and nearly 239% in 2023, reflecting insatiable demand for the company's artificial intelligence chips. Meanwhile, Apple shares slid 4% on Tuesday. They're now down 12% this year after gaining 30% in 2024. The iPhone maker has developed its Apple Intelligence suite of AI features for its phones and laptops, but its business doesn't have the same level of exposure to the AI boom. Nvidia has the vast majority of market share for graphics processing units, or GPUs, which have become essential for developing and deploying AI software such as OpenAI's ChatGPT. While revenue growth has slowed, it still nearly doubled to $35.08 billion in the most recent quarter. Apple was the first company to reach the $1 trillion, $2 trillion and $3 trillion market cap milestones. Nvidia previously passed Apple in June and then again in November. On Tuesday, Nvidia had a market cap of about $3.4 trillion, versus Apple at $3.3 trillion.Microsoft is just behind them at $3.2 trillion. A major buyer of Nvidia's GPUs. Microsoft said earlier this month that it expected to spend $80 billion on AI data centers in fiscal 2025. In November, Nvidia joined the Dow Industrial Average, replacing Intel, and joining Apple and Microsoft in the blue-chip index.