Apple Becomes $3 Trillion Company Again, But Nvidia Steals the Moment

[gusping]

Nvidia is one of the few times I can think of where the hardware component maker outpaces the software end user applications in profitability. It's been a meteoric rise. Kudos to Huang for seeing the opportunity presented by AI and seizing it early.

Absolutely, he's done a sterling job. He has gamers to thank for much of it. Nvidia until recently was a gaming-focused company, with hardware directed at gamers. These gaming GPUs just happen to be very good at AI.

The proof will be in the pudding of these software companies. I think it is a bit of a bubble that will normalise soon, and demand for these $40k GPUs will drop off. Time will tell.

 

[Analog Kid]

PE, FCF and concentration of customers

I guess there's a question as to whether the whole market is elevated right now, but relatively those companies seem reasonably valued. Apple has higher FCF than either Nvidia or MS and a lower PE than either which I think is right. Apple's business is reasonably well saturated. Nvidia is still in a growth mindset and I expect to stay that way until they can actually produce more than they can sell. MS is catching a bit of an AI wave from Azure and their affiliation with OpenAI. Nvidia's customers are concentrated, that's for sure, but in a silicon business there's a sweet spot-- selling to everyone is a support nightmare, but you don't want to be too dependent on too few customers. Right now it's the big cloud providers, which makes sense. I suspect other server makers see similar concentrations.

What would you expect to see different?

 

[chouseworth]

As for NVidia's other business, GPUs are a pretty small niche compared to APUs on the market for example. Many many more ARM CPUs ship than NVidia's entire sales. If the AI market reaches saturation or energy limits, which it is reaching, then their sales will dry up overnight.

Completely agree. And if/when China invades and shuts down TSMC....

 

[scorpio vega]

Are y’all sitting here debating which 3 trillion dollar companies is better lmao 🤣

 

[Analog Kid]

Absolutely, he's done a sterling job. He has gamers to thank for much of it. Nvidia until recently was a gaming-focused company, with hardware directed at gamers. These gaming GPUs just happen to be very good at AI.

The proof will be in the pudding of these software companies. I think it is a bit of a bubble that will normalise soon, and demand for these $40k GPUs will drop off. Time will tell.

Actually what I think is notable is that Huang didn't rely solely on their gaming customers to build their business. They had a nice business there that they could have milked without much risk, just raising polygon counts or whatever, but they saw an opportunity first through general purpose computing and then to using GPGPUs for AI development. They took their focus away from their core market at the right time and it paid off. CUDA was key to the whole thing, I think.

 

[purplerainpurplerain]

Jensen’s a fraud and his rich mates hyping the energy guzzling chatbots and spam generators are just cashing in on bubble. Whoever gets left holding the bag just funded Jensen’s leather jacket collections.

 

[picpicmac]

Especially combined with the silly base storage and memory configs

Sigh... always here people are complaining about Apple prices for Mac configs, but I can easily shop for other companies which have similar deltas for prices.

For example, here's the storage upgrade price for Lenovo's new Gen 12 Thinkpads:

Here's Dell's memory upgrade prices on their new XPS 16:

Complaining about Apple upgrade prices is out of context with the entire industry.

Apple, Lenovo, Dell - they charge these prices because they are full service companies, Apple especially with their brick-and-mortar stores.

If anyone think buying bits and pieces off of Amazon tells you how Dell, Lenovo, or Apple should price their products then they don't know how to run a business.

 

[jooish]

NVIDIA vastly over valued. Apple vastly under valued.

Hey Siri, is NVIDIA stock over valued?
Siri: "NVIDIA was up 5.16% today, trading at $1224.40."

AI that uses NVIDIA: "is apple stock under valued?"

AI:

 

[Graphate]

Well I don’t see a need to add an opinion to this thread, I did enjoy several posts…

Looks like I should buy some Nvidia stock.

You may want to check the 12-month history of insider trades before you click buy again. Although a future split might see a price jump even if otherwise unjustified.

NVIDIA vastly over valued. Apple vastly under valued.

It could be, but so hard to know what this quarter will bring… unless you were an insider… and they’ve not been buying.

By what metric?

They might be thinking by comparing net profits as of this moment. Apple seems to be earning about twice the net profits last quarter releases. But valuing based on past profits is only one factor, so there are other things to consider… i.e. tomorrow’s Nvidia.

Are y’all sitting here debating which 3 trillion dollar companies is better lmao 🤣

Exactly. And I regret posting now.

 

[blazerunner]

Nvidia should buy Apple and put it's GPUs in their laptops. Apples GPUs suck.

 

[ILoveCalvinCool]

Apple ran into the same problem that gargantuan companies often do. They wasted resources on things no one wanted (a car, a headset) because they came to believe that they and not the market were calling the shots. Microsoft made the same mistake when they ignored the internet. Apple is going to have to scramble to catch up, and it won't happen overnight.

 

[victorvictoria]

Looks like I should buy some Nvidia stock.

You're a wee bit llate out the gate, friend. Should have bought in 2022.
In 1921, RCA sold for $6.00/share. By 1929 it hit $500/share. In 1932, it dropped to $15.
Your job is to ascertain where on the timeline Nvidia is: 1921 (nope). 1922-1929 (likely). 1932 (inevitable, probably not imminent). You might squeeze a little more juice from the turnip, but at a $3 trillion market cap, realistically, how far can it go from here? It's already the second most valuable company in America, behind only Microsoft, ahead of apple by about $10 billion.

 

[PantherKang]

Yeah......., don't really care. Companies are companies. Life is short. Enjoy it however you do. Interesting story though.

 

[victorvictoria]

Nvidia should buy Apple and put it's GPUs in their laptops. Apples GPUs suck.

A $3.01 trillion company buying out a $3.00 trillion company? What entity has the wherewithal to fund that? None that I know of.

 

[JForestZ34]

They better be higher than apple!!! Their graphics cards sure show how valuable the company is


James

 

[sideshowuniqueuser]

NVidia will tank shortly and the industry will be normalised. Watch what happens over the whole AI industry fall out. The big investors are starting to move out already because they rode the gains. Now regulation, non-delivery and over-promise is going to kick in. This is the standard maturity curve for a new technology, the Gartner Hype Cycle

We are right at supplier proliferation.

We've done the whole "AI" thing a couple of times before and it was a bust before. It just has money and tech companies behind it this time.

Sure, but there is no way in hell AI's capabilities are plateauing, they are accelerating exponentially. The best part of this graph that would match where AI is at the moment is still in the R&D phase. Running LLM's is currently limited by the capability and cost of the hardware. And that's merely LLM's, we haven't even got to the point of Strong AI yet.

 

[GrayFlannel]

Looks like I should buy some Nvidia stock.

Ape buying.

 

[victorvictoria]

Nvidia's growth is due largely to the fact that their GPUs are powering most AI things these days... if Apple were to unveil AI hardware of their own, I wonder if their stock price would shoot up like crazy? 🤔

Apple doesn't make any chips. Apple BUYS chips from Nvidia, TSMC and various RAM vendors. The entire AI hardware industry is right now about 5-10 years behind Nvidia.

 

[cjsuk]

Sure, but there is no way in hell AI's capabilities are plateauing, they are accelerating exponentially. The best part of this graph that would match where AI is at the moment is still in the R&D phase. Running LLM's is currently limited by the capability and cost of the hardware. And that's merely LLM's, we haven't even got to the point of Strong AI yet.

Nothing can accelerate exponentially for very long.

There are physical limits.

There are complexity limits.

There are mathematical limits.

None of these are discussed.

 

[sideshowuniqueuser]

Nothing can accelerate exponentially for very long.

There are physical limits.

There are complexity limits.

There are mathematical limits.

None of these are discussed.

There are no mathematical limits to exponential growth. Infinity can't be reached.

 

[PBG4 Dude]

It’s hard to believe, but it has finally happened!

I currently have 4 shares of Nvidia and I bought them a while ago so I’m definitely happy with my investment so far

Nvidia is a great company and it won’t be long before Nvidia surpasses Microsoft as the largest company in the US by market capitalization

nVidia is completing a 10:1 split next Monday. Then you’ll have 40 shares.

 

[cjsuk]

There are no mathematical limits to exponential growth. Infinity can't be reached.

Well from a purist perspective yes, but the mathematical operations need to run on something which exists in our universe which has time, space and energy as constraining factors. So from an exponential growth perspective you hit a hard wall pretty quickly on all of those.

Simplicity leads to an increase in model size.

Model size increases time and requires increased precision.

Increased precision requires more space and energy.

I mean they're hitting limits and throwing stochastic rounding at stuff and going "yeah this piece of crap that hallucinates stuff will really turn out well if we stuff some noise into the system"...

 

[CrysisDeu]

Nvidia's growth is due largely to the fact that their GPUs are powering most AI things these days... if Apple were to unveil AI hardware of their own, I wonder if their stock price would shoot up like crazy? 🤔

No, Nvidia’s growth is also largely thanks to CUDA and the ecosystem built around it. Just hardware from Apple is not going to change that

 

[CrysisDeu]

You can try justifying this market cap, but it is clearly irrational. Certainly you could make money with this name, but you could also lose a lot of money. Be careful. There was a lot of FOMO in the nineties around tech, and I see it here again around AI. This is a cyclical sector, and I wouldn’t bet that this will change.

The net earnings can back it up, for a few more quarters at least. Nvidia’s PE is smaller than 2X of AAPL, with actual growth YOY. I don’t think it’s overvalued at this moment.

It might follow the trend of Cisco.. but AI does have more need for GPU upgrades compared to networking

 

[CrysisDeu]

Apple ran into the same problem that gargantuan companies often do. They wasted resources on things no one wanted (a car, a headset) because they came to believe that they and not the market were calling the shots. Microsoft made the same mistake when they ignored the internet. Apple is going to have to scramble to catch up, and it won't happen overnight.

I wanted it, but it has to be good - not Vision Pro