Nvidia Races Toward $4 Trillion Market Cap

By Douglas A. McIntyre Updated Oct 21, 7:22AM EDT · Published Oct 19, 9:17AM EDT

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Nvidia Races Toward $4 Trillion Market Cap — © Kerem35 / Shutterstock.com

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If Nvidia Corp (NASDAQ: NVDA | NVDA Price Prediction) shares rise and Apple Inc.’s (NASDAQ: AAPL) are flat, the former will pass the latter in market cap.
Two things could stop that if the overall market stays healthy.
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Based on market cap, Nvidia Corp (NASDAQ: NVDA) has climbed to second among all US public companies. At $3.4 trillion, it is just behind Apple Inc (NASDAQ: AAPL) by the same measure. One primary difference between the two stocks is that Apple is up 22% this year and Nvidia is 178% higher.

If Nvidia shares rise 17% and Apple’s are flat, Nvidia will pass Apple by the market cap measure. Only two things are likely to stop that if the overall market stays healthy.

Nvidia is central to the new universe of artificial intelligence (AI) hardware and software. Every mega-cap tech company is in the business, whether a pure-play company like OpenAI, which has a private valuation of over $150 billion and derives all of its revenue from AI operations, or Microsoft Corp. (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN), which have invested billions of dollars in transforming their companies into AI leaders but have other business operations.

Something that could slow or reverse Nvidia’s stock increase is if one of the large public tech companies relying on its chips says its growth in AI-related business revenue is slowing. Microsoft may be the best example. It releases earnings on October 30. Its stock and Nvidia’s are tied because the two companies’ revenues are married. New AI features are driving Microsoft’s cloud revenue.

The other event that could drive Nvidia’s stock either higher or lower is its earnings, which will be released on November 20th. Bank of America said Nvidia represented a “once in a generation” buying opportunity. The numbers will need to show that. They will need to resemble the figures from the prior quarter. Revenue rose 122% year over year to $30 billion. Per-share earnings rose 168% to $0.67. Anything short of a similar performance will take the stock down.

Prediction: This 1 Thing Will Be Nvidia’s Biggest Growth Driver Yet

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.