Apple and Nvidia: The Race to the First $5 Trillion Company

Despite no company ever reaching a $5 trillion market valuation, Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA) are in a competitive race to get there. With a market cap of $3.6 trillion, Apple currently holds the lead, while Nvidia follows closely at $3 trillion. The difference in valuation is akin to the full market cap of Netflix, Home Depot, or Johnson & Johnson.

Is Apple’s lead insurmountable for Nvidia, or could Nvidia surpass Apple on its path to this unprecedented milestone?

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Stagnation in Apple’s Growth

Both companies are well-known, with Apple recognized as the leading consumer tech brand, primarily due to the popularity of the iPhone. Conversely, Nvidia specializes in graphics processing units (GPUs), which are in high demand amid the artificial intelligence (AI) revolution.

While both companies offer substantial products, Nvidia is currently experiencing significant growth, unlike Apple. Apple has faced stagnation for the past three years, with its earnings per share and revenue showing little movement since early 2022.

AAPL Revenue (TTM) data by YCharts. EPS = earnings per share. TTM = trailing 12 months.

While there are signs of improvement, they are minimal. Analysts forecast a modest 4.6% revenue growth for fiscal year 2025, showcasing Apple’s sluggish trajectory. Despite this stagnant growth, Apple’s stock has surged 36% over the past three years.

This remarkable gain can be attributed to investors paying a premium for Apple’s stock.

AAPL PE Ratio data by YCharts. PE Ratio = price-to-earnings ratio.

Currently, Apple’s stock carries a high valuation of 38 times trailing earnings and 33 times forward earnings, despite its limited growth. In stark contrast, Nvidia boasts a much faster growth rate.

Nvidia’s Potential to Rapidly Accelerate Towards $5 Trillion

Nvidia’s opportunity to catch up with Apple and potentially surpass it lies in its rapid growth trajectory. Recent reports revealed that Nvidia’s revenue for the fourth quarter of FY 2025 (ending January 26) surged by 78% year-over-year, with earnings per share (EPS) rising by 82%. The management also anticipates a Q1 revenue increase to approximately $43 billion, indicating a robust growth rate of around 65%.

Nvidia’s management is known for its conservative forecasts, often underestimating growth. For instance, they expected Q4 revenue to grow by 70%, but actual growth exceeded that at 78%. This suggests Nvidia’s growth remains strong and consistent.

This trend serves as a positive signal for investors and may be what propels Nvidia closer to the $5 trillion threshold. Moreover, Nvidia is valued more reasonably than Apple, despite its quicker growth.

AAPL PE Ratio (Forward) data by YCharts. PE Ratio = price-to-earnings ratio.

This disparity in valuations raises questions about Nvidia’s stock being undervalued given its growth. It appears that investors may be fatigued by Nvidia’s consistent strong performance, seeking the next emerging opportunity instead.

Will Nvidia overtake Apple to become the first company to reach a $5 trillion valuation? If it maintains its current growth pace, the likelihood appears favorable. Revenue projections for the next two fiscal years reveal promising data:

AAPL Revenue Estimates for 2 Fiscal Years Ahead data by YCharts.

By applying their current profit margins to projected revenue, we can estimate net incomes for both companies. In two fiscal years, Apple’s profits are expected to reach $115 billion, while Nvidia could achieve $132 billion. Therefore, if these forecasts are accurate, it will be difficult to justify a higher valuation for Apple compared to Nvidia in two years.

Additionally, Apple’s revenue growth is unlikely to accelerate to rates similar to Nvidia’s, further supporting the view that Nvidia may reach the $5 trillion market cap first, assuming its growth trajectory continues.

Is Now the Right Time to Invest in Nvidia?

Before making any investment in Nvidia stock, consider the following:

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Keithen Drury holds positions in Home Depot and Nvidia. The Motley Fool has positions in and recommends Apple, Home Depot, Netflix, and Nvidia. The Motley Fool also recommends Johnson & Johnson. Please consult the Motley Fool’s disclosure policy for more information.

The views and opinions expressed herein belong to the author and do not necessarily reflect those of Nasdaq, Inc.