Nvidia Races Toward $4 Trillion Market Cap

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Based on market cap, Nvidia Corp ( NASDAQ: NVDA ) has climbed to second among all US public companies. At $3.4 trillion, it is just behind Apple Inc ( NASDAQ: AAPL ) by the same measure. One primary difference between the two stocks is that Apple is up 22% this year, and Nvidia is 178% higher.

If Nvidia shares rise 17% and Apple’s are flat, Nvidia will pass Apple by the market cap measure. Only two things are likely to stop that if the overall market stays healthy.

Nvidia is central to the new universe of AI hardware and software. Every mega-cap tech company is in the business, whether a pure-play company like OpenAI, which has a private valuation of over $150 billion and derives all of its revenue from AI operations, or Microsoft Corporation ( NASDAQ: MSFT ) and Amazon.com Inc ( NASDAQ: AMZN ) which have invested billions of dollars in transforming their companies into AI leaders but have other business operations.

Something that could slow or reverse Nvidia’s stock increase is if one of the large public tech companies relying on its chips says its growth in AI-related business revenue is slowing. Microsoft may be the best example. It releases earnings on October 30. Its stock and Nvidia’s are tied because the two companies' revenues are married. New AI features are driving Microsoft’s cloud revenue.

The other event that could drive Nvidia’s stock either higher or lower is its earnings, which will be released on November 20th. Bank of America said Nvidia represented a “once in a generation” buying opportunity. The numbers will need to show that. They will need to resemble the figures from the last quarter. Revenue rose 122% year over year to $30 billion. EPS rose 168% to $.67. Anything short of a similar performance will take the stock down.

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