New Tech Order: MSFT #1, NVDA #2, AAPL #3 ?
$NVIDIA Corp(NVDA)$ could soon surpass Apple to become the world's 2nd-most valuable company.
This is plausible because Nvidia stands to benefit the most, from a surge in AI application adoption.
Reliance of virtually all artificial intelligence applications such as OpenAI's ChatGPT on Nvidia's high-end chips has helped the stock nearly triple in value over the past year to $2.68 trillion.
On 11 Jan 2024, $Apple(AAPL)$ ceded its No. 1 spot to $Microsoft(MSFT)$.
This happened as the once high-flying Apple grappled with (a) weak demand for its iPhones and (b) tough competition with Huawei in China.
As of 29 May 2024, it was last valued at $2.92 trillion .
Zacks Investment Management., Client portfolio manager - Brian Mulberry noted:
Apple has been dominant for so long, especially on the growth and innovation front.
Recently though, Apple's innovation curve seems to have flattened recently.
It is showing slower future growth.
In contrast.
On the other hand, Nvidia has been able to catch wave upon wave of growth:
Beginning with Gaming demand.
Then it progressed to Crypto.
And now Artificial intelligence, that is relevant to most.
Nvidia have been able to perfectly match innovation with demand and that equals explosive growth.
The semiconductor company is heavily weighted on the S&P 500 (6.2%) and the Nasdaq 100 (7.2%).
And it has been pivotal in driving US stocks to record highs and accounted for more than a third of the S&P 500's gains this year.
Growth speed.
Nvidia also became the fastest company to grow from $1 trillion to $2 trillion in 2024, zooming past $Amazon.com(AMZN)$ , Alphabet (GOOG) and Saudi Aramco.
Since its blowout forecast about a year ago, Nvidia has consistently breezed past Wall Street's lofty expectations for revenue and profit, with demand for its graphic processors far outstripping supply as Big Tech rushes to embed AI applications.
Sharp increases in analysts' earnings estimates have resulted in a fall in the stock's forward earnings valuation, even with the share price racing higher.
It traded at 37x forward earnings, compared with 48x earnings a year ago, LSEG data showed.
ETF & Options too !
Nvidia is also popular in the derivatives market.
$GraniteShares 2x Long NVDA Daily ETF(NVDL)$ that tracks twice the daily percentage change in Nvidia, is the largest single stock ETF.
The fund clocked $1 billion in daily turnover for the first time ahead of Nvidia's results last week and its total net assets have hit a record $2.82 billion in the week ending 31 May 2024, according to Lipper data.
Options traders are bullish as Nvidia's volumes, particularly for calls, has picked up in recent sessions after the surge in its stock price.
Thursday marked the 5th straight session where >1 million Nvidia call options changed hands, the longest streak in the stock's history, according to a Reuters analysis of Trade Alert data.
My viewpoints: (mine only)
Of all the Reuters posts that I have come across, this is dated and short on details.
For starters, Apple's smartphone shipments in China rose 52% in April from a year ago.
It is extending a rebound seen in March, according to data from a research firm affiliated the Chinese government.
The jump follows a weak performance by the US tech giant in the world's biggest smartphone market earlier this year.
This came about amid intensifying competition in the high-end smartphone category from local rivals like Huawei & Xiaomi.
Apple is the only major name in the world of Big Tech that has NOT made its ambitious AI plans public yet.
This explains why its stock price is range-bound unlike Nvidia, Microsoft, Meta, Amazon that have socialized and publicized their AI initiatives to no ends.
But that will change soon.
Apple will unveil a major AI update for iPhones at their upcoming annual Worldwide Developers Conference (WWDC) at Apple Park, Cupertino from Jun 10-13.
Leaked info said it will include features:
Summarizing voice messages.
Editing photos with AI.
Smarter searching on Safari and Spotlight
A Siri upgrade with more natural conversations.
Personalized emojis based on user’s texts
Summaries of notifications, including messages, calls, and even news articles
This will be Apple’s announcement to the world, it is back.
Will it be enough to excite the world over again; just like when Apple unveiled the very first iPhone - that took the world by storm?
Will it surpass its January high of $195.18 per share, I have an inkling that it would.
And in the process, it will once again seal its #2 spot firmly and perhaps even take a stab at the #1 spot again. And its about time !
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Do you think Nvidia will be able to takeover Apple’s #2 spot?
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Oh wow why $Microsoft(MSFT)$ has become No.1
In long term MSFT and AAPL should still come before NVDA
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