Why Nvidia Is Worth More Than Apple

Investing

Published: October 26, 2024 7:23 am

Last Updated: October 28, 2024 7:12 am

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Nvidia Corp. (NASDAQ: NVDA) and Apple Inc. (NASDAQ: AAPL) are in a race for which will have the higher market cap.
Apple needs modest earnings, but Nvidia needs better.
Also: Dividend legends to hold forever.

When asked why he made more money than U.S. President Herbert Hoover in 1930, Babe Ruth said, “Why not? I had a better year than he did.” Ruth made $80,000 that year. Hoover made $75,000. Hoover went on to lose the 1932 election to Franklin Roosevelt. After hitting the most home runs in baseball history, Ruth went into the Hall of Fame.

Friday morning, Nvidia Corp.’s (NASDAQ: NVDA) market cap moved just ahead of Apple Inc.’s (NASDAQ: AAPL). At the end of the day, Apple had edged ahead by a hair. Each company’s figure sat at just over $3.5 trillion.

Nvidia has clearly had a better year. Its stock has risen 185%, while Apple’s is up 20%, which is about the same as the rise in the S&P 500.

Apple’s earnings for the quarter about to be announced are not supposed to be spectacular. The iPhone 16 was barely released in the third calendar quarter of the year. In the same period last year, Apple had revenue of $89.5 billion and per-share earnings of $1.47. iPhone revenue was $48.3 billion. Apple will need to beat all of those numbers for its stock to continue to rise.

Nvidia has a much higher bar to clear. Last year, its revenue for the quarter about to be announced was $6.7 billion, and earnings were $2.60 per share. If the last quarter reported is any indication, revenue rose 122% year over year to $30 billion, and earnings were up 168% to $0.67 per share. Nvidia will need to match that growth for its stock to continue rising rapidly or perhaps just hold its own.

Based on modest expectations, Apple may be able to hold the top market cap spot. For Nvidia to hold that spot, its earnings must be spectacular.

Nvidia Price Prediction and Forecast

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