Apple's perch as the second-most valuable company in the S&P 500 is up for grabs. And it won't take much for Nvidia to steal it away.
Nvidia's stock price only needs to rise to 1,200 for the company's value to hit $2.9 trillion and surpass Apple's. That's really not much of a stretch as it's only 9.5% higher than Nvidia's stock is now.
Just this year, shares of Nvidia have risen 121%. At the same time shares of Apple are down 1%. Demand for Nvidia's semiconductor designs is soaring as they're perfect for running AI applications. Apple, on the other hand, continues to milk its high-priced smartphones, which still lack modern AI capabilities.
"From a low of $280 billion in mid-2022, Nvidia's market cap rose to $2.8 trillion this week, making it the third-largest company in the U.S. and just $100 billion away from eclipsing Apple and its $2.9 trillion market cap," said Bespoke Investment Group.
Nvidia's Value Surges Past $2.6 Trillion
Remarkable fundamental growth continues to power Nvidia's value higher. And there doesn't seem to be any barrier.
The company's adjusted profit per share exploded 288% in fiscal 2024 to $12.96 a share. And the report on Feb. 21 came in nearly 5% higher than expected. And for fiscal 2024, the growth prospects are even higher. Analysts think the company will earn $26.99 a share, up 108% from the same year-ago period.
Additionally, analysts see big growth for Nvidia's shares, too. Analysts think the stock will hit 1,188.66 in 12 months' time — ironically just below where they need to be for the company's value to surpass Apple's.
What About Apple?
Of course this analysis is based on Apple's share price sitting still. Further deterioration in Apple's stock price would make Nvidia's relative rise even faster.
Right now, though, analysts' hopes for Apple aren't glowing. The company is expected to make $6.58 a share in fiscal 2024. If that's right, it would mark growth of just 7%. Revenue growth is seen as even more anemic by analysts. They're calling for Apple's fiscal 2024 revenue to rise less than 1% to $386.9 billion.
And tepid fundamentals spell a slow rise in Apple stock. Analysts think the company's stock will trade for just 205.64 in 12 months' time. If that's right, it marks a gain of just 7.9%.
Can Nvidia Do It?
Nvidia's meteoric rise already pushed it past the values of Alphabet and Amazon.com. Alphabet is now the fourth most valuable S&P 500 company at $2.1 trillion. And Amazon.com is fifth at $1.8 trillion.
But even if Apple's stock can rise despite stagnant revenue, it's only a matter of time before Nvidia takes the bronze medal in the race for No. 2 in the S&P 500's value.
Most Valuable S&P 500 Stocks
| Company | Ticker | Year-to-date % ch. | Market value ($ trillions) |
|---|---|---|---|
| Microsoft | 10.5% | $3.1 | |
| Apple | -0.1% | $2.9 | |
| Nvidia | 121.3% | $2.7 | |
| Alphabet | 23.5% | $2.1 | |
| Amazon.com | 16.1% | $1.8 | |
| Meta Platforms | 32.0% | $1.2 | |
| Berkshire Hathaway | 15.6% | $0.9 | |
| Eli Lilly | 40.7% | $0.7 | |
| Broadcom | 19.2% | $0.6 | |
| JPMorgan Chase | 19.1% | $0.6 |
