Nvidia is the world’s first $4 trillion company, leaving Apple – long the king of market milestones – in its wake.
Apple was the first to hit $1 trillion, $2 trillion and $3 trillion.
But while its market capitalisation ($3.15 trillion) has idled since first closing above that landmark in mid-2023, Nvidia’s has quadrupled, fuelled by insatiable demand for its AI chips.
Even that understates Nvidia’s rise: the stock is up more than 1,000 per cent since early 2023.
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[ Nvidia outpaces Microsoft and Apple on path to $4 trillion valuationOpens in new window ]
That sounds bubbly, but staggering revenue growth suggests otherwise. Revenues rose 69 per cent last quarter to $44 billion, with another record forecast for this one. Its top customers – Microsoft, Meta, Amazon, Alphabet – are to spend $350 billion on capital expenditure this year, much of it on Nvidia hardware.
Valuation remains punchy, but not absurd. Nvidia’s price-sales ratio is nearly four times that of Apple’s, but the difference between their forward price-earnings ratios is slight.
Nvidia bulls will note its growth rate is exponentially higher than Apple’s and its PEG ratio (which adjusts for earnings growth) is actually far lower.
Apple is stable and cash-rich, but slow growth means it’s far from cheap.
Nvidia appears riskier, but it keeps growing into its multiple.
For now at least, investors are willing to pay up for speed over stability.
