Should Apple Be Worth More Than Nvidia? Yes

By Douglas A. McIntyre Published Jul 27, 10:45AM EDT

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Apple's 23% stock surge this year against Nvidia's 10% closes a market cap gap that once seemed insurmountable as AI enthusiasm cools.
$AAPL is the only mega-cap contrarian AI bet, while $NVDA risks overexposure with a $250 billion OpenAI commitment from a company not profitable until 2030.
Apple locked in Google Gemini as its AI engine for just $1 billion annually, gaining capability while sidestepping massive standalone AI infrastructure bets.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.

Should Apple Be Worth More Than Nvidia? Yes — © hocus-focus / iStock Unreleased via Getty Images

Apple (NASDAQ: AAPL | AAPL Price Prediction) was the first company to have a $1 trillion market cap on August 2, 2018. It crossed the $2 trillion market cap on April 19, 2020; Today, there are 15 companies worth more than $1 trillion. Most got there because they are parts of the AI revolution.

Nvidia (NASDAQ: NVDA) is at the top of the market cap pyramid with a market value of $5 trillion. There is a rumble that Apple could take the top spot again because it is at $4.9 trillion. Apple’s share price is up 23% this year, compared to the S&P 500 at 8%. Nvidia is only higher by 10%.

What happened? There is growing skepticism that AI has created a bubble, at least for now. Based on news reports, Nvidia will guarantee an OpenAI investment of $250 billion in a data center. And there is already a large concern that data center capacity is well above what will be needed. This is, to some extent, because if AI growth slows, probably because large corporations do not see a return on investment, data centers could sit empty.

The Nvidia move is especially daring because OpenAI forecasts it may not make money until 2030. Between now and then, a lot could change.

Just a few months ago, there was a perception that Apple was on the AI ropes. It had no standalone AI-based products of its own. It had fallen behind in the AI race. Many of its AI engineers had left for other companies.

Apple countered the anxiety about its AI future with a move that sparked much skepticism. It decided to use Google Gemini as the AI engine of its Apple Intelligence and Siri. The price is a seemingly cheap $1 billion a year. In the background of the news is that Google will get huge adoption of Gemini via the Apple ecosystem that has hundreds of millions of iPhones, Macs, and iPads

Apple is one of the few contrarian votes against massive investments in standalone AI companies. Thus, investors who want an easy way to bet against the AI grain can simply buy its stock. If the bet is right, people who are long Apple and short Nvidia will make a fortune

There are a large number of bets that AI will rule the world. Apple is the only mega-cap company that allows people the ability to vote the other way.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.