Apple (AAPL 2.60%) is the largest company in the world with a market cap of $3.1 trillion, reaching this position thanks to robust demand for its consumer electronics products such as the iPhone, MacBooks, and iPads, among others.
However, the past few years haven't been all that great for Apple, as its largest product by revenue -- the iPhone -- has stagnated in terms of sales. In the first quarter of fiscal 2025, for instance, Apple's iPhone revenue was flat year over year. Given that this product accounts for 55% of Apple's top line, it is easy to see why the company's revenue increased by only 4% during the quarter.
NASDAQ: AAPL
Key Data Points
The company has been relying on its high-margin services business to drive stronger earnings growth, but the influence of the iPhone on Apple's business indicates why its earnings increased just 10% from the year-ago period. Throw in the uncertainties created by the tariff-fueled trade war that could negatively impact sales of smartphones, and it is easy to see why analysts are expecting the company's earnings to grow by just 7% this year.
However, there's another company expected to deliver much stronger growth, and it may even overtake Apple's market cap in the next year. Let's take a closer look at that name and check why it may make sense to buy it over Apple right now.
Healthy artificial intelligence (AI)-fueled demand is leading to solid growth for this chipmaker
The robust demand for Nvidia's (NVDA 1.07%) graphics processing units (GPUs) for deployment in AI data centers has made it the third-largest company in the world, with a market cap of $2.7 trillion. So, Nvidia isn't far behind Apple in terms of valuation, and the one-year median price targets of both companies indicate that the chipmaker is likely to get bigger than the consumer electronics giant.
NASDAQ: NVDA
Key Data Points
Nvidia's 12-month median price target of $160 points toward potential gains of 47% in the next year. That's higher than the 17% gain Apple stock is expected to deliver in the next year, as per its median price target of $245. So, analysts are expecting Nvidia to become a bigger company than Apple in the next 12 months, and that's not surprising, as the former's earnings are expected to grow at a much faster pace of 48% in the current fiscal year.
The reason why Nvidia could indeed deliver such terrific growth is the outstanding demand for its latest generation of Blackwell AI GPUs. The company sold $11 billion worth of Blackwell processors in the fourth quarter of fiscal 2025, accounting for nearly a third of its total data center revenue. What's worth noting is that Nvidia's data center revenue nearly doubled year over year in the previous quarter to $35.6 billion, and Blackwell's contribution clearly indicates that it is now moving the needle in a bigger way for the company.
Looking ahead, the demand for Nvidia's data center GPUs is likely to remain robust, thanks to massive investments such as the $500 billion Stargate Project led by OpenAI and SoftBank. The Stargate team expects to deploy a massive $100 billion this year to build AI infrastructure in the U.S., followed by another $400 billion over the next four years.
The first data center site under the Stargate Project is expected to use 400,000 Nvidia chips. The entry-level Blackwell B100 GPU reportedly has an average selling price of $30,000 to $35,000, while the top-end GB200 chip goes for $60,000 to $70,000. Assuming Nvidia sells those 400,000 chips for even $35,000 apiece, it could generate $14 billion in revenue at least from the first Stargate site. Given that a total of 10 Stargate sites are expected to be built in the U.S., Nvidia has a massive opportunity to sustain the impressive growth it's been delivering in recent years.
Moreover, the heavy investments in AI infrastructure by big tech companies this year are going to be another tailwind for the chip giant. Additionally, the company is gaining momentum in areas such as automotive, where its revenue is expected to jump significantly this year, and a $300 billion addressable opportunity suggests that there is terrific room for growth in this market.
The valuation makes Nvidia a better buy right now
We have seen why Nvidia is likely to overtake Apple's market cap in the next year, but what makes the chipmaker worth buying is its attractive valuation. Investors can buy Nvidia at 24.8 times forward earnings right now, which is cheaper than Apple's forward earnings multiple of 28.7.
So, a combination of faster growth, cheaper valuation, and the healthy state of the AI chip market as compared to the potential decline in the smartphone market are the reasons why Nvidia could become a bigger company than Apple in the next year.
