Nvidia and Apple looked set to trade places as the world's largest company yet again on Tuesday, after the iPhone maker's so-so revenue guidance weighed on its shares.
Nvidia stock climbed 1.5% to $205 in premarket trading. Apple declined 4.7% to $322.37. That would give Nvidia a market cap of $4.94 trillion and Apple a market cap of $4.71 trillion at the opening bell.
Apple dethroned Nvidia on Friday amid a brutal artificial-intelligence selloff. Nvidia is seen as one of the main beneficiaries of the AI boom, while Apple has relatively little exposure to the technology.
There wasn't an obvious factor driving Nvidia shares higher, although investors may have been getting over the worst of their fears about AI spending. Futures tracking the tech-heavy Nasdaq 100 climbed 0.2%, even as a flare-up in oil prices dragged down the broader market.
Investors may be feeling bullish after a report said Nvidia CEO Jensen Huang had given Marvell and Lumentum his blessing before the networking companies agreed the megadeal announced on Monday.
Marvell CEO Matthew Murphy and Lumentum CEO Michael Hurlston spoke to Huang on a phone call before the deal was unveiled, according to Bloomberg, which cited people familiar with the matter.
Consolidation is probably a good thing for Nvidia, given there are worries about data-center demand outpacing supply as the AI buildout gathers pace. Nvidia invested $2 billion earlier this year in both Marvell and Lumentum, in exchange for convertible preferred stock.
Still, the quick reversal probably says more about Apple than it does about Nvidia. The iPhone maker's fourth-quarter earnings report looked solid, but its guidance wasn't good enough to ease concerns about its stock's lofty valuation.
Apple shares were trading at 36-times expected earnings as of Tuesday, according to a FactSet poll. That's a five-turn premium to their average from the past five years.
Comments