When asked why he made more money than US 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 EPS 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 EPS was $2.6. If the last quarter reported is any indication, revenue rose 122% year over year to $30 billion, and EPS was up 168% to $.67. Nvidian 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.
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