Nvidia‘s (NASDAQ: NVDA) growth has accelerated since early last year, largely driven by advancements in artificial intelligence (AI). The company’s long-standing knowledge in graphics processing units (GPUs) has positioned it ahead of competitors like Advanced Micro Devices and Intel in the AI sector. These chips are vital for building AI models, given their capability to handle numerous tasks at once.

This surge in AI demand has led to a remarkable increase in Nvidia’s chip sales, with data center revenue soaring 524% since January 1, 2023.

With rising earnings, Nvidia’s stock value has also jumped significantly. The share price has climbed 763% since the start of last year, pushing its market capitalization from $360 billion to over $3 trillion. This remarkable growth has positioned it as one of the most valuable companies in the world, currently holding the No. 2 position just behind Apple (NASDAQ: AAPL).

The rapid ascent of Nvidia raises a pivotal question: Will it outpace Apple in market capitalization, and if so, when? Nvidia has consistently outstripped Apple in growth over the past decade, with its stock skyrocketing over 26,000% compared to Apple’s 790%. Much of this remarkable growth has been driven by the company’s dominance in AI chips starting in 2023.

Consequently, Nvidia appears on track to potentially overtake Apple as the most valuable company in the world, possibly as early as 2030. Here’s why.

Nvidia Continues to Outpace Apple in Growth

Nvidia has experienced explosive growth over the last decade, solidifying its place in the chip industry. Initially, the company gained recognition in the gaming sector by being among the first to sell GPUs directly to consumers. Today, its chips are essential for gamers worldwide who wish to create powerful gaming PCs.

This success in the gaming market has enabled Nvidia to expand into several other domains. Now, its chips are integral to game consoles, data centers that support cloud services, autonomous driving tech, robots used in Amazon facilities, laptops, and AI models, which provides investors with multiple avenues for growth.

Nvidia’s growth has greatly outstripped Apple by various measures since 2014. Even before the AI boom, the company was on track to potentially exceed Apple’s market position.

This year, Nvidia reported a free cash flow of $39 billion, a notable contrast to Apple’s $104 billion. However, Nvidia’s free cash flow has surged by 125% in the past year, while Apple’s has only increased by 5%. This rapid growth in Nvidia’s cash reserves could soon allow it to close the gap with Apple, providing it the needed resources to expand its business and reinforce its leadership in AI.

Nvidia Holds a More Stable Position in AI at Present

This year, Apple has aggressively expanded its initiatives in artificial intelligence, rolling out numerous generative features across its product range and launching devices equipped to handle the demanding workloads required for AI operations. Nevertheless, it faces stiff competition from other tech giants like Samsung, Microsoft, and Alphabet, all offering rival AI solutions.

Specifically in the smartphone arena, Apple held a 15.8% market share in the second quarter of 2024, a small decline from 16% in Q2 2023, as it contends with rising Chinese competitors such as Xiaomi and OPPO. Meanwhile, Alphabet’s recent release of the Pixel 9 smartphone features AI capabilities that may challenge Apple’s forthcoming iPhone 16.

In contrast, Nvidia commands an estimated 90% share of the AI GPU market. Although AMD and Intel aim to catch up, Nvidia is unlikely to relinquish its lead anytime soon, bolstered by greater financial strength compared to its rivals. For context, AMD reported free cash flow just exceeding $1 billion in 2024, while Intel’s was a negative $12 billion.

The demand for AI is growing rapidly as businesses increasingly seek powerful chips to deliver state-of-the-art products. This large market presents Nvidia with significant opportunities to continue launching enhanced chips yearly, attracting a host of AI-oriented companies eager to remain competitive.

Thus, Nvidia appears well-positioned for continued growth in the AI sector, potentially overtaking Apple’s market cap by the decade’s end. This makes it a compelling consideration for investment before opportunities dwindle.

John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, serves on The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is also a member of The Motley Fool’s board. Dani Cook currently has no stake in any of the mentioned stocks. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Microsoft, and Nvidia. Additionally, The Motley Fool recommends Intel and suggests the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.

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