Microsoft, Apple, and Nvidia are among the $3 trillion market value club, who is the "first brother of US stocks"?

National Business Daily

2024-06-15 16:17Published on the official account of Sichuan Daily Economic News

Every reporter: Wen Qiao Every editor: Cai Ding

On June 13, local time, Apple's market value surpassed Microsoft and returned to the top of the global market capitalization. This achievement is due to Apple's grand launch of the latest masterpiece in the field of artificial intelligence (AI) at the Worldwide Developers Conference (WWDC) a few days ago, "Apple Smart". Since June 11, Apple's stock price has risen for three consecutive trading days, showing the market's firm confidence in Apple's AI strategy.

Daniel Ives, managing director of Wedbush Securities, predicted in an interview with the Daily Economic News: "In the next year, Apple, Microsoft and Nvidia will compete fiercely around a market capitalization of $4 trillion. "While Microsoft is seen as having a head start in generative AI, while Apple has previously lagged behind in AI, Wall Street's perception of Apple is shifting.

However, just one day later, Apple's "world's largest market capitalization" throne changed hands again. As of the close of trading on the 14th, the top three U.S. stock market capitalizations were: Microsoft, Apple, and Nvidia, with market capitalizations of $3.29 trillion, $3.26 trillion, and $3.24 trillion respectively.

As AI becomes the core of the competition for these tech giants, the battle for the "market capitalization supremacy" is intensifying. Apple, Microsoft, and Nvidia, who are now among the $3 trillion market value club at the same time, who is the "first brother of US stocks"?

AI dominates the top 10 in the US stock market capitalization, and the global market capitalization ranking continues to shuffle

As of the close of the U.S. stock market on the 13th, Apple's total market capitalization was about $3.29 trillion, surpassing Microsoft. This is the first time since January that Apple's closing market value has surpassed Microsoft's, and Wall Street's large-cap stocks have rearranged. However, on the 14th, Microsoft's market value once again surpassed Apple's, with a market value of $3.29 trillion, and Apple's market value fell to $3.26 trillion.

At present, in the ranking of U.S. stock companies in terms of market capitalization, Microsoft, Apple, and Nvidia are among the top three. As these three tech giants compete for AI, the battle for the throne of "the world's largest market capitalization" has also entered a white-hot stage.

U.S. stock market capitalization ranking Image source: companiesmarketcap.com

The reporter of "Daily Economic News" noticed that among the top 10 companies in the market capitalization list of US stock companies, there are as many as 8 AI-related companies.

"There's a lot of confidence that you're going to be the winner of AI, and in this market, it seems like if you're the winner of AI, you're going to be hyped up," said Rhys Williams, chief strategist at Wayve Capital Management. ”

The aforementioned three companies are among the top three companies in terms of market capitalization, and AI has contributed a lot.

On June 10, Apple announced a new smart assistant at the annual WWDC conference, "Apple Smart", which will be deeply integrated into various operating systems such as iOS, macOS and visionOS, marking Apple's official unveiling of the long-rumored AI. Since June 11th ~ June 13th, Apple's stock price has risen three times in a row, with a three-day increase of more than 10%, the largest since August 2020.

Image source: Yahoo Finance

Microsoft, one of the old tech giants, and Apple have never stopped fighting for the "big brother in the United States". With star company OpenAI in hand, Microsoft has been leading the generative AI market before. Using the GPT series model, Microsoft has launched and updated a series of applications: Microsoft 365, New Bing (Copilot), Azure Intelligent Cloud, etc., to find a new breakthrough for its own revenue growth.

In January, Microsoft reached a new milestone when it became the second company to reach a market capitalization of $3 trillion after (then) Apple. Since then, Microsoft has surpassed Apple many times and sat on the top spot of Wall Street's market capitalization. Until Apple regained the first place in market capitalization on the 13th, this throne has also been in the hands of Microsoft. Since the beginning of this year, Microsoft has risen by nearly 20%.

Image source: Yahoo Finance

In addition to Microsoft and Apple, Nvidia has also joined the competition for the first place in market capitalization on Wall Street. Since the wave of generative AI led by ChatGPT has prevailed, Nvidia has achieved amazing performance with its ace GPU. Since the beginning of this year, Nvidia's stock price has risen by more than 160%, and last year it rose by nearly 240%.

Image source: Yahoo Finance

On June 5 this year, Nvidia's market capitalization broke through the $3 trillion mark in one fell swoop, joining the $3 trillion market value club. Looking back on the development of NVIDIA's market capitalization, on May 30 last year, the company's market value exceeded $1 trillion for the first time, becoming the first chip company in the U.S. stock market with a market value of more than one trillion yuan; On March 1 this year, Nvidia crossed the $2 trillion mark.

A year ago, Nvidia was worth less than $1 trillion, ranking at the bottom of the list of tech giants. In the year from June 2023 to June 2024, Nvidia's market capitalization has grown by leaps and bounds from $1 trillion to $3 trillion.

At this point, AI has become the mainstream narrative of U.S. stock giants.

The battle for the market value of $4 trillion has begun, who is the "first brother of US stocks"?

"In the coming year, the competition between Apple, Microsoft, and Nvidia for a market capitalization of $4 trillion will be in focus." Daniel Ives, managing director of Wedbush, told the Daily Economic News.

While Microsoft has long been considered to have a head start in the generative AI space, and Apple has been repeatedly criticized for "not having a clear AI story" and falling behind other rivals, there is now a new voice in the Wall Street debate about "the big brother of US stocks".

This week, Apple's market performance after the official announcement of "Apple Smart" also illustrates this change in attitude. On June 10, Apple's stock price ended down 2% on the 10th due to Apple's emphasis on Apple intelligence throughout the WWDC conference, and ChatGPT was surprisingly reduced to only a collateral feature.

But something dramatic happened a day later, when on the 11th, Apple suddenly soared 7% to a record high. For a technology giant with a huge market capitalization of more than 3 trillion yuan, there is only one reason for the huge contrast in the sentiment behind the funds: in the era of large models, Apple may not be as backward as the public thinks.

"Wall Street's delayed positive reaction suggests that investors are beginning to fully understand that the AI revolution will be realized through Apple's consumer devices in the coming year." "Apple will create a new AI app store in the coming years, which will be the primary way consumers interact with generative AI," said Daniel Ives. We believe it will be another major growth area for Apple in the coming years. While Apple is a late starter in the AI space, it has the world's largest consumer install base, and Cook and his team are uniquely positioned to monetize AI. ”

As the global smartphone industry enters the era of AI mobile phones, Apple may be the only company that can open up the AI experience and circulation of all hardware terminal devices in a short period of time with its solid ecological barriers.

Wall Street, meanwhile, is as bullish as ever on Microsoft. Microsoft uses ChatGPT to improve its products and services, and then exports AI capabilities through cloud services to help its cloud revenue growth, making it quickly overtake. Right now, Microsoft is also trying to build its own AI empire. In recent months, Microsoft has been diversifying its bets, not only investing in startups globally, but also starting to build its own AI power internally.

InvestorPlace believes that its Azure cloud business as a whole will benefit more from AI and will be the next exciting business. Microsoft is most likely to be the first company to break through its $4 trillion valuation. At current levels, though, Microsoft's path to $4 trillion may not be so smooth.

For NVIDIA, in the short term, technology companies need to continue to invest in computing power and resources, and the demand for chips continues to rise. MarketWatch has a view that Nvidia GPUs are essentially the new gold/oil in the tech sector, and it could become the world's first stock with a market capitalization of $4 trillion.

However, in addition to the optimistic voices, there are also analysts who say that neither closed-source models such as ChatGPT nor open-source models under Meta and Google have yet to explore a stable commercialization path. From the perspective of price and market business model, as well as the fact that technology giants are piling up self-developed chips, NVIDIA's chip procurement in the future is also uncertain.

From $1 trillion to $2 trillion, it took Apple 2 years, Microsoft 2 years and 2 months, and Nvidia only 8 months. From $2 trillion to $3 trillion, it took Apple 1 year and 5 months, Microsoft 2 years and 7 months, and Nvidia only took more than 3 months - 104 days!

From $1 trillion to $3 trillion, Huang took less than one year to complete Cook's journey of three years and five months. On the track of sprinting to a market value of $4 trillion, who will be the first to hit the line?

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