Blogs -Throwback: Nvidia will Surpass Apple’s Valuation in 4.5 Years

Throwback: Nvidia will Surpass Apple’s Valuation in 4.5 Years


January 07, 2022

Beth Kindig

Lead Tech Analyst

Throwback: Nvidia will Surpass Apple’s Valuation in 4.5 Years

Last August, I predicted that Nvidia could surpass Apple on market cap. Here is what I said in my Forbes article: “I believe Nvidia is capable of out-performing all five FAAMG stocks and will surpass even Apple’s valuation in the next five years” and I expanded on this by stating, “We believe [Nvidia] can surpass Apple by capitalizing on the artificial intelligence economy, which will add an estimated $15 trillion to GDP. This is compared to the mobile economy that brought us the majority of the gains in Apple, Google and Facebook, and contributes $4.4 trillion to GDP.”

Source: YCharts

As strong as Nvidia has been on price action, Apple will not allow my prediction to be an easy slam dunk as the heavyweight briefly claimed a $3 trillion market cap.

Source: YCharts

Currently, Nvidia has a market cap of $690 billion and Apple has a market cap of around $2.9 trillion. Nvidia’s market cap rose about 22% compared to Apple’s 17% since my publication of the article. I made this prediction in August of 2021, and during the month of November, we were beginning to make headway with a diversion between semiconductors and big tech.

Source: YCharts

One of the main reasons for me to make the bold statement that Nvidia will surpass Apple’s valuation is that the market opportunity for Nvidia is vast when compared to the mobile economy, which benefitted Apple.

“Artificial intelligence will touch every aspect of both industry and commerce, including consumer, enterprise, and small-to-medium sized businesses, and will do so by disrupting every vertical similar to cloud. To be more specific, AI will be similar to cloud by blazing a path that is defined by lowering costs and increasing productivity.”

When we began covering Nvidia, we were stating the company would become a leader on AI while most analysts were stuck on the gaming storyline as this was Nvidia’s core product for many decades. This caused many investors to miss out on the top supplier for AI accelerator chips in the data center. We had predicted this three years ago when we wrote: Nvidia has two impenetrable moats – which are developer adoption and the GPU-powered cloud. Notice, we did not mention gaming or crypto mining despite this being the only two narratives on this company at the time.

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We published this again in 2019 for premium members when we stated:

Nvidia’s acceleration may happen one or two years earlier as they are the core piece in the stack that is required for the computing power for the front-runners referenced in the graph above. There is a chance Nvidia reflects data center growth as soon as 2020-2021. -published August 2019, Premium I/O Fund.

Since the original 2018 publication on the two impenetrable moats, Nvidia has greatly outperformed FAAMG. We believe the same will be true over the next five years.

Source: YCharts

One reason for this is that last year, Nvidia released the Ampere architecture and A100 GPU as an upgrade from the Volta architecture. The A100 GPUs are able to unify training and inference on a single chip, whereas in the past Nvidia’s GPUs were mainly used for training. This allows Nvidia a competitive advantage by offering both training and inferencing. The result is a 20x performance boost from a multi-instance GPU that allows many GPUs to look like one GPU. The A100 offers the largest leap in performance to date over the past 8 generations.

One year later and the Ampere architecture is becoming one of the best-selling GPU architectures in the company’s history. This quarter, Microsoft Azure recently announced the availability of Azure ND A100 v4 Cloud GPU which is powered by NVIDIA A100 Tensor Core GPUs. The company claims it to be the fastest public cloud supercomputer. The news follows the launch by Amazon Web Services and Google Cloud general availability in prior quarters. The company has been extending its leadership in supercomputing. The latest top 500 list shows that Nvidia power 342 of the world’s top 500 supercomputers, including 70 percent of all new systems and eight of the top 10. This is a remarkable update from the company.

There are many other catalysts that will help Nvidia become the world’s most valuable company to prove my prediction true, including the metaverse, automotive, data analytics such as Spark with GPU acceleration, virtual machines for AI workloads and perhaps edge devices by licensing (or acquiring) Arm architecture.

We only have to wait until August of 2026 to see if Nvidia did indeed pass up Apple’s market cap. However, the wait should be an easy one if Nvidia continues to treat investors to the smooth gains (like butter) we’ve seen as of late.

Disclaimer: This is not financial advice. Please consult with your financial advisor in regards to any stocks you buy.

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