As Nvidia Closes In On Apple's Market Cap, Munster Explains Why Cupertino Could Generate Better Returns Over Next Year

Nvidia Corp.‘s NVDA leadership in cutting-edge artificial intelligence has fueled a surge in its market capitalization, bringing it closer to the coveted $3 trillion mark. A tech venture capitalist on Monday said that Apple, Inc. AAPL, which is slightly ahead of Nvidia in terms of market capitalization, could be a better investment option for a one-year timeframe.

What Happened: Nvidia’s market cap may continue to swell over the next year, says Deepwater Asset Management’s Gene Munster. The view is in line with his previous prediction that the AI bubble will last for about three to five years.

Nvidia currently has a market cap of $2.829 trillion (based on Monday’s closing price) vis-a-vis $2.975 trillion for Apple. Nvidia’s shares may have added another $50 to achieve a market cap of $3 trillion and go past Apple, provided Nvidia reverses the pre-market dip and Apple stock remains unchanged or moves lower.

Nvidia ended Monday’s session up 4.90% at $1,150, according to Benzinga Pro data, with the upside attributable to a positive reaction to Jensen Huang’s Computex 2024 keynote delivered in Taiwan. In premarket, the stock edged down 0.10%. Apple, meanwhile, slipped 0.15% to $193.74.

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Nvidia Vs. Apple: Despite the all-pervading Nvidia hype, Munster expects Apple to be a winner this year. “I believe owning Apple over the next year will have a higher return because the market is in denial about Apple’s AI potential,” he said.

The fund manager expects Apple stock to dip following the annual Worldwide Developer Conference keynote due on June 10, given the “buy on the rumor, sell on the news” mentality around Apple events.

The likely decline may mislead investors, he said.

“I suspect the substance of next week’s announcements will underscore that Apple means business when it comes to AI,” Munster said. “Weaving AI throughout the product line will take a couple of years and ultimately drive Apple’s returns higher than Nvidia’s.”

Munster also disclosed that he owned Apple shares.

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