Nvidia surpasses Apple in market cap again as AI fortunes diverge
One stock is growing quickly and surrounded by positive news coverage. The other, by comparison, is a snail being tracked by a rain cloud.
Call it a tale of two $3 trillion companies. Nvidia surpassed Apple in market capitalization for the sixth time, and the gap in value between the two megacaps is growing on Wednesday, with Nvidia up 4.2% and Apple treading water as of 10:15 a.m ET.
Both are very expensive tech stocks, judging by popular, surface-level measures of valuation like the forward-price-to-earnings ratio. But based on recent news and sentiment surrounding these behemoths, that’s where the similarities end.
Usually, investors are willing to pay a lofty price for stocks because those companies’ top and bottom lines are growing fast.
That’s still true of Nvidia. Even with revenue and profit growth decelerating, those metrics are still poised to be up in excess of 70% year on year when it reports quarterly results on February 26. But the bar for Apple is nearly on the floor. Consensus estimates are for sales and income to be up merely in mid-single digits year on year when the company releases updated financials next week.
Nvidia bulls are also getting a consistent drumbeat of reassurance that the AI boom is still on, from Microsoft and Amazon’s data-center spending plans to the fresh assortment of AI infrastructure initiatives outlined by President Trump along with executives from Oracle, OpenAI, and Softbank on Tuesday.
Apple, on the other hand, is underwhelming on AI to the point where it may be adversely affecting its core hardware — or at the very least, failing to be a compelling selling point. According to many reports, Apple Intelligence hasn’t driven a strong upgrade cycle. Far from it. Seemingly every day brings a new headline about softness in iPhone sales, with China in particular cited as a sore spot.
As such, the stock has been getting trounced during a period of historically unprecedented market breadth that has seen two-thirds of S&P 500 constituents rise for six straight sessions.
Two of Apple’s worst five days relative to the equal-weight S&P 500 over the past four years have happened in the last three trading days.
Shares are teetering near their 200-day moving average — a level they haven’t closed below since early May — with the shares down more than 10% year to date in their worst month since December 2022, as things stand.
Apple down double digits in a month where the S&P 500 rises more than 3%? That’s something that hasn’t happened in more than a decade.
