Apple (NASDAQ: AAPL) was the first company to have a $1 trillion market cap on August 2, 2018. It crossed the $2 trillion market cap on April 19, 2020; Today, there are 15 companies worth more than $1 trillion. Most got there because they are parts of the AI revolution.
Nvidia (NASDAQ: NVDA) is at the top of the market cap pyramid with a market value of $5 trillion. There is a rumble that Apple could take the top spot again because it is at $4.9 trillion. Apple’s share price is up 23% this year, compared to the S&P 500 at 8%. Nvidia is only higher by 10%.
What happened? There is growing skepticism that AI has created a bubble, at least for now. Based on news reports, Nvidia will guarantee an OpenAI investment of $250 billion in a data center. And there is already a large concern that data center capacity is well above what will be needed. This is, to some extent, because if AI growth slows, probably because large corporations do not see a return on investment, data centers could sit empty.
The Nvidia move is especially daring because OpenAI forecasts it may not make money until 2030. Between now and then, a lot could change.
Just a few months ago, there was a perception that Apple was on the AI ropes. It had no standalone AI-based products of its own. It had fallen behind in the AI race. Many of its AI engineers had left for other companies.
Apple countered the anxiety about its AI future with a move that sparked much skepticism. It decided to use Google Gemini as the AI engine of its Apple Intelligence and Siri. The price is a seemingly cheap $1 billion a year. In the background of the news is that Google will get huge adoption of Gemini via the Apple ecosystem that has hundreds of millions of iPhones, Macs, and iPads
Apple is one of the few contrarian votes against massive investments in standalone AI companies. Thus, investors who want an easy way to bet against the AI grain can simply buy its stock. If the bet is right, people who are long Apple and short Nvidia will make a fortune
There are a large number of bets that AI will rule the world. Apple is the only mega-cap company that allows people the ability to vote the other way.