Apple Is Just $42 Billion Away From Passing Nvidia as the World’s Most Valuable Company
Apple just hit a record close while Nvidia shed billions in a brutal sector selloff, and the gap between the two most valuable companies on earth has shrunk to a fraction of what it was one week ago.
Apple (NASDAQ:AAPL | AAPL Price Prediction) closed Thursday at a record $348.22. That put its market value at $5.082 trillion, just $42 billion behind Nvidia (NASDAQ:NVDA) at $5.124 trillion.
About a week earlier, Apple needed a gain of about 7% to catch Nvidia. If Nvidia holds flat, Apple now needs about 0.83%, which works out to roughly $351.10 a share.
Apple rose $4.23, or 1.23%, after setting an all-time intraday high of $348.36. Nvidia fell $9.76, or 4.40%, to $212.21. Apple has not passed Nvidia yet, and a small move in either stock could flip the order.
Alphabet (NASDAQ:GOOGL) at $3.965 trillion, Microsoft (NASDAQ:MSFT) at $3.869 trillion and Amazon (NASDAQ:AMZN) at $2.701 trillion are far behind, so only two companies are in this race.
AI Chip Selling Handed Apple Most of the Ground
The Nasdaq Composite fell 2.60%, or 694 points, to 26,008.86, its steepest daily drop since early June. The Philadelphia Semiconductor Index lost 6.7%, its worst day since June 23, and four major chip and memory stocks each fell more than 8%.
“This is the most widespread selling of the AI trade we have seen all year,” said Michael O’Rourke of Jones Trading. When a whole sector sells off together, the mood around AI is the likely cause of Nvidia’s drop, more than anything specific to the company.
The longer trend also favors Apple, which gained 1.82% over the past week and is up 28.44% this year. Nvidia fell 2.31% for the week and 7.28% for the month, which leaves it up 14.05% for the year.
At 7:59 p.m. ET, Apple was up 0.11% after hours at $348.60, and Nvidia was up 0.09% at $212.40, leaving the gap about the same.
Nvidia’s Buyers Have Demand but Need Funding
On Thursday, Jensen Huang said demand from neocloud companies is “off the charts” but “capital is scarce.” Demand only turns into chip orders when buyers can pay for them. If these customers can’t raise enough money, Nvidia’s sales could hit a ceiling no matter how strong interest is.
Apple Stayed Out of the AI Spending Race
Apple last closed above Nvidia on July 27, at about $4.94 trillion versus about $4.75 trillion. That day, Jay Woods of Freedom Capital Markets said: “Once criticized for not spending more on AI, they have been able to avoid some of those capex pitfalls.”
The iPhone Duo, Apple’s first foldable, starts at $1,999 and goes on sale today. Online orders “sold out in minutes,” and nearly every configuration now shows delivery on January 25. That could push some revenue into later quarters.
Apple’s November 2 Report Could Decide the Race
Apple reports fiscal fourth-quarter results on November 2, the first earnings call for CEO John Ternus. In July, Apple guided to 9%-11% revenue growth and warned that supply would get tighter. At a record price and 45 times earnings, a weak report would likely end the chase.
Nvidia trades at 43 times earnings after revenue grew 105.8% last quarter, and it reports around November 18. The company growing much faster now has the lower multiple, and if AI selling eases, Nvidia would likely pull further ahead of Apple again.
The selloff in chips is a reminder that the AI trade now runs through the companies supplying power, cooling, and networking to the data centers, not just the chipmakers. We profiled seven of those suppliers in a free report you can grab here.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
