Wall Street expects that these three technological giants, after exceeding $3 trillion in capitalization, will compete in a stock market race to reach a new milestone, driven by artificial intelligence.
Until just ten days ago, Manzana It was the company with the worst performance on the stock market among the six large American technology companies. However, after revealing his strategy in artificial intelligence generative on June 10, he starred in a rally bursátile that propelled it to first place in the ranking by capitalization. The company, which a few days before had seen how Nvidia surpassed it in stock market value, was once again the queen of the stock market for a few hours ahead of Microsoft. This Tuesday, the processor manufacturer Nvidia made history again by positioning itself as the most valuable technology.
The stock market takeoff of Apple, which added $260 billion to its capitalization last week, and the meteoric rise of Nvidia in the last year perfectly illustrate the magnitude of the investor enthusiasm around AI.
This collective fervor, which awakens echoes of past bubbles, will boost the shares of the best-positioned technology companies. Optimism leads some analysts to predict a race between Nvidia, Apple and Microsoft to reach $4 trillion in capitalization.
“They will be the protagonists during the next year of the crace towards 4 trillion dollars of capitalization of the technology sector,” says Dan Ives, an analyst at Webdush, who believes that “the AI party has only just begun,” which is why he argues that we will see an upward cycle in the technology sector during this year and 2025. This analyst equates this moment with 1995, “with a wave of transformative technological spending not seen since the beginning of the Internet,” he says.
That boom ended in a bubble that burst,. “This is not a bubble, but the beginning of the fourth industrial revolution,” defends Ives. Although he recognizes that there will be “periods of digestion in technological values”, he emphasizes that we are facing “a market opportunity of more than a trillion dollars” for the sector in the coming years.
These giants are the only technology companies that exceed three trillion dollars in capitalization. Nvidia is in the lead, with 3.34 trillion dollars of capitalization; It is followed a short distance away by Microsoft, which is worth 3.32 billion dollars. Apple, for its part, is capitalized at 3.29 billion dollars.
Nvidia
The Nvidia processor group, the company that is making the most money thanks to AI, is the big star of Wall Street. The company has more than tripled its stock market value in just over a year, adding more than two billion capitalization.
The explosion of AI has catapulted Nvidia. Its graphics chips optimized to process large volumes of data are essential for training and executing the language models required by artificial intelligence. The company hquadrupled quarterly revenue (up to $26 billion) and multiplied its profit by 22 (up to $14,881 million) in the year and a half since ChatGPT kicked off the generative AI race.
The group led by Jensen Huang leads the market for chips for AI, with more than 80% share. Based on this dominant position, it is the company best placed to take advantage of the strong demand expected for these processors.
Ives equates Nvidia chips with “the new gold or oil” in the technology industry, due to the enormous needs for these GPUs over the next few years to build the infrastructure to sustain AI.
Huang believes we are on the verge of “fourth industrial revolution” powered by AI. A wave of innovation that requires significant investments in updating and expanding data center infrastructure, which will become what it calls “AI factories.” In his opinion, in the next four to five years around one trillion dollars will be invested in creating this global infrastructure.
Nvidia is keen to maintain its first-mover advantage, and has announced that it will release a new accelerator chip every year. Later this year, BlackBell will arrive. In 2026, it will be Rubin’s turn.
The big question is how long this AI investment cycle will last. In the short term, Nvidia sees no dark clouds on the horizon, despite an increase in competence by chip manufacturers (AMD and Intel) and large technology companies such as Amazon, Google, Microsoft, which manufacture their own chips.
UBS forecasts strong demand, which will translate into revenue this fiscal year of about $175 billion, 45% more, with an earnings per share of $41. If so, Nvidia could more than double the historical turnover record of Intel, the historic chip manufacturer. The unknown is how long this explosion will last, and at what point Nvidia will be affected by cyclical waves of demand in the chip industry.
Manzana
Apple has entered the race after presenting its AI strategy on June 10, based on functionalities built on its own technology (Apple Intelligence), improving the capabilities of your conversational assistant Siri and the integration of ChatGPT by OpenAIto which other models will be added in the future.
As Francisco Jeronimo, IDC analyst, explains, Apple was forced to make a move because it faces “a disruptive technology potentially harmful to its business and future.” This expert considers that the company has deployed a solid strategy, laying the foundation for Siri to become a “true digital assistant that understands context and can provide natural language responses to user needs.” Thus, he believes that this renewed Siri “will change the rules of the game and offer a compelling reason for many users to update their iPhone in the next years”.
This is the great unknown. Will generative AI be a sales booster that opens a new supercycle for the iPhone. Will Apple do as well with AI as the recent stock rally suggests? At the moment, there is no consensus among analysts.
In the short term, there will be no effect on the business. First, because the functions will take time to arrive and will initially only be in English, while competitors such as Samsung and Google on mobile phones or Microsoft on PCs already have AI capabilities deployed. Apple Intelligence features will be released in trial mode this fall in new operating systems. The integration with ChatGPT will not arrive until the end of the year. And Siri’s more advanced app-controlling capabilities won’t be ready until 2025.
“He Apple announcement was a bit disappointing“, they say at UBS, whose analysts consider that Apple’s AI strategy “will not lead to a significant update cycle this fall”, with the arrival of the iPhone 16, contrary to what they think at JPMorgan and Morgan Stanley. UBS sets a price of $190 per share, due to “a difficult growth context” and a “poorly defined AI strategy“.
In contrast, Wedbush is optimistic. Thus, he sees AI as a “catalyst” for a sales supercycle because, he points out, at least 270 million iPhone users have not updated their terminal in the last four years. In addition, he foresees the company monetizing more advanced features through subscriptions in the future, which would translate into another growth engine for services, Apple’s second largest business.
Microsoft
The group led by Satya Nadella has moved quickly around AI, and is one of the technology companies best positioned to capitalize on this wave of innovation, due to its strength in the cloud services and business technology segment.
Ives believes that AI is for Microsoft what the iPhone was for Apple. According to its forecasts, over the next three years more than 70% of Microsoft’s installed base will have embraced the company’s AI offering. In his opinion, fiscal year 25, which begins next July 1, will mark “the turning point” in this upward trajectory.
The deployments of Copilot (Microsoft’s AI technology that is already used by 60% of Fortune 500 companies) could add $25 billion in revenue to the company over the next year. In addition, AI will skyrocket demand for the cloud. “For every 100 dollars of spending on Azure [nube pública de Microsoft] in recent years, there will be a $40 incremental spend due to AI in the future,” he explains. In its latest results, the company noted that AI demand contributed to Azure’s growth by seven percentage points, to 31 %.
Meanwhile, Microsoft, like the rest of the big technology companies, triggers the capex to sustain this ambitious AI strategy, due to the high requirements in data centers and chips that this wave of innovation requires.
