In the realm of the “Magnificent 7” stocks, both Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) have stood out, but their trajectories have taken distinct paths in the past year. While Nvidia has claimed the top spot among this elite group in 2023 and continues to hold it in 2024, Apple, despite a 49% gain last year, found itself as the second-worst performer in the Magnificent 7 lineup.
Although Apple’s stock has seen a slight uptick from its 2024 lows, its year-to-date performance remains marginal, with gains of less than 1% by Monday’s close. Notably, Nvidia’s market capitalization nearly surpassed Apple’s last month, only to cool off a post-earnings rally. On the other hand, Apple is yet to reclaim its $3 trillion market cap and its long-held title as the world’s largest company, which it ceded to Microsoft (NASDAQ:MSFT) last year.
What factors have driven this divergence between Apple and Nvidia, and which of these tech giants presents a better investment opportunity in the AI domain? We delve into these questions in this analysis.
Diverging Performances
Apple vs. Nvidia Stock prices often reflect a company’s earnings and growth outlook. In the last fiscal year, Apple witnessed a year-over-year decline in revenues across all four quarters, grappling with sluggish iPhone sales, especially in the competitive Chinese market, where rivals like Huawei pose formidable challenges.
Contrastingly, Nvidia’s growth story has been remarkable, with its revenues soaring by 126% in the last fiscal year. Although the fiscal years of Apple and Nvidia do not align, the substantial disparity in their growth trajectories is evident.
Nvidia has emerged as a frontrunner in benefiting from artificial intelligence (AI) investments, with analysts forecasting revenues of $119 billion for the current fiscal year – a staggering 11-fold increase compared to fiscal year 2020. In contrast, Apple’s revenue growth is projected to be modest, with an anticipated rise of just about 1% in the current fiscal year.
Apple’s AI Endeavors Lag Behind
While Nvidia has been at the forefront of AI initiatives since its fiscal Q1 2024 earnings report in May 2023, Apple has been perceived as trailing in its AI endeavors. References to “AI” were notably scarce in Apple’s earnings calls until Apple CEO Tim Cook addressed AI during the fiscal Q1 2025 earnings call in February, hinting at further developments in this space later in the year.
During the fiscal Q2 earnings call, Cook expressed optimism about Apple’s prospects in generative AI, emphasizing the transformative potential of AI and the company’s unique advantages in this realm.
Investment Perspective
Apple vs. Nvidia Gene Munster, managing partner at Deepwater Asset Management, anticipates Apple outperforming Nvidia in the coming year. While acknowledging Nvidia CEO Jensen Huang’s pivotal role in advancing AI, Munster believes investors may be underestimating Apple’s AI potential.
Analyst Outlook
AAPL vs. NVDA Overall, analysts exhibit a more bullish sentiment towards Nvidia stock. Apple garners a consensus rating of “Moderate Buy,” with the majority of analysts endorsing it as a “Strong Buy” or “Moderate Buy,” while a smaller proportion advocates a “Hold.”
In contrast, Nvidia enjoys a consensus rating of “Strong Buy,” with over 92% of analysts recommending it as a “Strong Buy” or “Moderate Buy,” while the remaining analysts suggest a “Hold.”
Looking ahead, while Apple has a mean target price of $205.96, implying a 6.1% upside from Monday’s close, Nvidia trades near its mean target price of $1,152.04, following its recent rally.
Analysts have frequently adjusted Nvidia’s target price upwards following its strong performance, with several analysts raising their projections after the fiscal Q1 earnings release.
Can Apple Outshine Nvidia?
Despite the prevailing optimism surrounding Nvidia, analysts like JP Morgan’s Samik Chatterjee foresee significant potential for Apple in the AI domain, likening it to the transformative impact of 5G on iPhone sales. As Apple gears up for the Worldwide Developers Conference (WWDC) in June, potential announcements regarding AI advancements could drive excitement among investors and consumers alike, potentially catalyzing a supercycle in hardware sales.
In conclusion, considering Nvidia’s lofty valuations, Munster leans towards Apple as the frontrunner for outperformance in the near to medium term.
Featured Image: Freepik
Author Faith Yakubu 
