Source: Finance Association
Author: Huang Junzhi
① Almost all artificial intelligence applications, such as OpenAI's ChatGPT, rely on Nvidia's high-end chips;
② As a result, the company's stock price has nearly doubled in the past year, and the current market value has reached 2.70 trillion US dollars;
③ Apple's current market capitalization is $2.95 trillion, second only to Microsoft's $3.09 trillion.
Driven by the artificial intelligence (AI) boom, the stock price of Nvidia, the biggest beneficiary, has skyrocketed. Now it seems that it may soon surpass Apple to become the second-highest company in the world by market capitalization. The latter is still relatively backward in the field of artificial intelligence.
Almost all artificial intelligence applications, such as OpenAI's ChatGPT, rely on Nvidia's high-end chips, which has nearly doubled the company's stock price in the past year. The current market value has reached $2.70 trillion, which is only 250 billion US dollars short of Apple.
Although the stock's gains were hit by a series of “shocks” in the second half of the week, a slight correction from the record high set earlier this week, given that its position as “AI leader” is not in vain, it doesn't seem impossible to take the “TOP 2” throne from Apple now.
Wall Street analysts also never hide their optimism about Nvidia. I/O Fund technology analyst Beth Kindig (Beth Kindig) said a few days ago that the stock's rise is far from over. She predicts that with its impenetrable moat, Nvidia's stock price will soar 258% from current levels by 2030, and its market value will reach 10 trillion US dollars.
In contrast, Apple relinquished the “top 1 market capitalization” position to Microsoft earlier this year. This once prosperous company is struggling to cope with weak demand for iPhones and fierce competition in the Chinese market. Its current market capitalization is $2.95 trillion, second only to Microsoft's $3.09 trillion.
Brian Mulberry, customer portfolio manager at Zacks Investment Management, said: “This is certainly noteworthy because Apple has been dominant for a long time, particularly in terms of growth and innovation. Recently, however, Apple's innovation curve seems to have leveled off, indicating a slowdown in future growth.”
“Nvidia, on the other hand, has been able to seize wave after wave of growth. Starting with gaming demand, then cryptocurrency, and now artificial intelligence, they've been able to perfectly match innovation with demand, which equates to explosive growth.” he added.
The semiconductor company is heavily weighted in the S&P 500 and NASDAQ indices, and has played a key role in driving the US stock market to new highs. More than one-third of the increase in the S&P 500 index this year came from Nvidia.
Apple's turnaround
Of course, Apple is not without a chance to win, although up to now, the company has not had any disruptive achievements in the field of AI, which clearly lags behind other tech giants. However, Apple's upcoming Global Developers Conference (WWDC) on June 10, according to Dan Ives, a well-known strategist at the US investment bank Wedbush, this is Apple's first turning point.
According to Ives, WWDC is “the most important event in a decade” as Apple prepares to release a series of artificial intelligence products.
“In our view, bringing artificial intelligence to its critical developer community and laying the foundation for bringing generative AI to consumers starts with Apple.” He added that he also expects Apple to announce a partnership with OpenAI.
Apple's second turning point is of course the upcoming iPhone 16.
Ives said all of these features could be integrated into the upcoming iPhone 16, which will be released in September, which could trigger a “revival of growth” as more people upgrade their iPhones. He anticipates that the iPhone upgrade cycle may exceed 270 million units.
Furthermore, Steve Eisman (Steve Eisman), the prototype for the movie “The Big Short,” also believes that Apple is a potential winner of the AI craze. He explained that in the long run, Apple will become a key center for AI-led software, bringing huge room for growth to its products.
“I know very well that when all these apps come out, I need a new phone, a new iPad, and a new laptop. So when these apps come out, the biggest beneficiary is probably Apple.” he said.
Bank of America, on the other hand, pointed out that mobile phones will require more powerful computing power to handle the daily use of artificial intelligence applications. For mobile phone manufacturers, this means the best opportunity to “upgrade” and push 2.2 billion active smartphone users into the artificial intelligence stage. Apple, on the other hand, will take over this “splendid wealth,” and its valuation will become even higher.
The bank also said that one of the keys to the success of artificial smartphones is artificial intelligence application developers. And it believes that developers will develop a large number of artificial intelligence applications running on Apple phones, thereby creating new profit points for Apple.
Editor/Jeffy