These tech leaders have been outstanding performers, but which one offers better returns from here?
Nvidia (NVDA 1.53%) has delivered market-smashing returns for investors. The graphics chip leader's share price has rocketed 1,900% over the last five years, outpacing the broader market and Apple's (AAPL -0.36%) 317% return.
Nvidia's superior returns reflect the tremendous growth it has experienced from data center customers for its high-powered graphics processors. However, Apple is the more valuable company right now, with a market capitalization of $2.8 trillion, and that is likely to increase as it wins more customers with the iPhone. This means Nvidia, which has a market of just under $2 trillion, will likely have to keep growing at high rates to surpass Apple's market value.
Let's see what Apple could be worth in six years and whether Nvidia can beat it.
Apple stock could rise as much as 80% using Wall Street's growth expectations
Apple has a diverse revenue stream coming from a roster of several products and services, but the iPhone is still the cash machine, making up 42% of the company's revenue in fiscal 2023. Dependency on the iPhone has made Apple's revenue growth inconsistent in recent years, but overall, Apple is benefiting from its growing installed base of devices, which is now over 2.2 billion and could keep growing for several more years.
The global smartphone market is expected to increase by a total of 1.5 billion users by 2029, according to Statista. If Apple captures 20% of that increase, consistent with its recent share of the global smartphone market, that would add another 300 million customers for the iPhone. That could significantly increase the company's installed base of devices as some of those customers go on to buy other products.
The Wall Street consensus has Apple's annual revenue reaching $512 billion by fiscal 2027, which would be annualized growth of 7.5% from last year's total.
Analysts project Apple's earnings per share to grow at a compound rate of 9.4% over the long term. It reported earnings per share of $6.13 last year, so that would put the company's earnings in 2030 at $11.64.
If Apple stock is still trading at a forward price-to-earnings (P/E) ratio of 28, the stock price would trade at $325 in 2030, or 80% above its current share price. Assuming Apple's shares outstanding remain constant, its market cap (stock price times shares outstanding) would also increase by 80% and reach $5 trillion in six years.
Nvidia's growth hinges on AI spending
Nvidia's market cap is currently $1.95 trillion, so its share price would have to more than double to match Apple's projected market cap of $5 trillion in six years.
The good news is that Nvidia is experiencing surging demand for its chip hardware as data centers start upgrading their systems to train a computer to learn by itself. Spending on artificial intelligence (AI) technology is projected to grow from $200 billion to $1.8 trillion by 2030, according to Statista.
Nvidia makes graphics processing units (GPUs) used for playing video games and powering incredibly complicated computing models for AI training, robotics, and self-driving cars. However, data center revenue made up 78% of the business last year and grew 217%.
As that triple-digit level of growth suggests, it's got a long growth runway. Most of Nvidia's data center growth has recently come from large cloud providers, but other industries are starting to invest in AI infrastructure, including healthcare and financial services.
Analysts expect Nvidia's total revenue to triple by 2027 to $192 billion. Earnings are projected to grow 35% per year, which would put its future earnings at $105 by 2030.
Nvidia trades at a high P/E based on its trailing earnings, but looking ahead to this year's estimate, it trades at a more reasonable forward P/E of 32. Assuming Nvidia is still trading at the same forward P/E, its stock price could reach $3,360 by the end of 2030, or 328% above the current share price. That would put its market cap at over $8 trillion.
Nvidia stock is the better buy
The GPU is essential to power the stringent demands on data processing that AI requires, and this market is dominated by a duopoly between Nvidia and Advanced Micro Devices. What makes Nvidia a safe bet is that it has led the GPU market for many years and currently controls an estimated 80% share of AI chips. Nvidia is more dominant in GPUs than Apple is in smartphones.
Nvidia appears to be on track to not only exceed Apple's market cap but potentially become the most valuable company in the world in the next decade.
John Ballard has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, and Nvidia. The Motley Fool has a disclosure policy.
FAQs
Most of that growth began in 2023, when Nvidia's dominance in AI chips send the stock soaring. As a result, Nvidia looks likely to steal Apple's crown as the world's most valuable company, and it could do it as soon as 2030.
How big will Nvidia be in 2030? ›
Nvidia's current market capitalization stands at $3.34 trillion USD. Our projection is that Nvidia will achieve a market capitalization of $8 trillion by 2030 or even earlier.
Did Motley Fool recommend Nvidia? ›
The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Oracle, and Tesla.
Is Nvidia going to beat Apple? ›
However, Nvidia's lead in AI and more extensive financial resources than its competitors indicate it could surpass Apple in 2025.
What will Apple stock be worth in 2030? ›
Apple stock prediction 2030
According to various analyst projections, Apple's stock price is expected to continue its upward trend in the long term. By 2030, the stock price is predicted to reach $510, with some estimates suggesting it could go as high as $1,008.
Can Nvidia become a 10 trillion dollar company? ›
Nvidia is on track to hit a $10 trillion valuation, analyst Beth Kindig says. Kindig is forecasting strong growth and "fireworks" for the stock after its Blackwell launch. Jensen Huang assured investors on Nvidia's next-gen AI chip, promising "billions" in revenue.
Can NVDA reach $2000? ›
Nvidia stock forecast for 2024: Most analysts on Wall Street expect Nvidia stock to reach new historical levels above $1,500 to the $2,000 barrier.
Does Warren Buffett invest in Nvidia? ›
NASDAQ: NVDA
Warren Buffett and tech stocks go together like...well, they usually don't go together. The legendary investor typically avoids stocks that are out of his wheelhouse. And tech isn't his strong suit. Unsurprisingly, Buffett doesn't own a single share of Nvidia (NVDA 0.11%).
What did Jim Cramer say about Nvidia? ›
Jim Cramer in a latest program reiterated that NVIDIA Corp (NASDAQ:NVDA) is doing “amazing things” with generative AI and accelerated computing and they don't have anything to do with the Fed. Despite this, Cramer said that NVIDIA Corp (NASDAQ:NVDA) stock has “become a wasteland.”
Is Nvidia over or undervalued? ›
The intrinsic value of one NVDA stock under the Base Case scenario is 81.59 USD. Compared to the current market price of 118.95 USD, NVIDIA Corp is Overvalued by 31%.
Nvidia's swift rise saw it temporarily overtake Apple in market cap earlier this year, but it didn't last. However, the chipmaker's consistent ability to outpace Apple in growth suggests it's a matter of when, not if, Nvidia will one day be worth more than Apple.
Will Nvidia become the most valuable company? ›
Nvidia Overtakes Microsoft as World's Most Valuable Company Nvidia Overtakes Microsoft as World's Most Valuable Company. Nvidia has become the most valuable company in the world after its market capitalization grew to $3.34 trillion, overtaking Microsoft at $3.32 trillion.
Why Apple stopped using Nvidia? ›
Apple used to work closely with NVIDIA, until 2008. In 2007 and 2008, Apple made Macbook Pro models with the ill-fated NVIDIA Geforce 8400M and 9400M. These Geforce chips had a manufacturing defect in the chip die that caused the GPUs to fail prematurely.
What will Microsoft stock be worth in 2030? ›
Key takeaways: Microsoft stock prediction
The stock's resilience is also attributed to its solid quarterly results and strategic investments in AI and cloud computing. By 2030, analysts predict the stock could reach between $850 and $1,000, making it a promising investment opportunity for long-term investors.
What is the Apple forecast for 10 years? ›
According to analysts, it was projected that Apple's share price could reach $220 by the end of 2023, $250 in 2024. Apple long term stock forecast is anticipated to be $315 in 2025, $370 in 2026, $425 in 2027, $465 in 2028, and $480 in 2029. In 2030, analysts anticipate Apple shares will be worth $510.
What will Apple be worth in 5 years? ›
Assuming it continues to trade at 28 times earnings in five years and achieves $10.33 in earnings at the end of the forecast period, its stock price could jump to $289. That would be a 57% increase from current levels.
What will the Nvidia stock price be in 2040? ›
Moderate growth (SPX500 historical ROI of 11.13%): The stock could hit $5,346 by 2040 and $15,358 by 2050. Aggressive growth (US100 historical ROI of 15.2%): Nvidia's stock might soar to $9,854 by 2040 and $40,562 by 2050.
Can NVDA reach $10,000 per share? ›
You know those far-fetched headlines asking if a stock can go to $10,000 by 2025, but it's only trading at $1,000? It is pure silliness. However, Nvidia (NASDAQ:NVDA) stock could be the exception.
Will Nvidia reach 4 trillion? ›
Nvidia will win the race to a $4 trillion market cap—but the long-term big tech battle might be different, experts say. NVDA. MSFT. AAPL.
Where will Nvidia be in 10 years prediction? ›
By the conclusion of 2030, 24/7 Wall Street estimates that NVIDIA's stock will be trading for $362.00, good for a 209.98% increase over today's share price, based on an EPS of $7.24 and a P/E ratio of 50.
