Nvidia (NASDAQ:NVDA) became the world’s most valuable company this week, surpassing Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) earlier in the month. Wedbush analysts believe that the race to a $4 trillion market cap in tech will be a key focus over the next year, primarily between those three companies.
“Nvidia's GPU chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the 4th Industrial Revolution well underway,” Wedbush analysts said in a note.
The investment firm notes that Nvidia's dominance in data center AI spending positions it as a pivotal player in the AI revolution, with all generative AI applications relying on its GPUs. Nvidia and Microsoft are seen as the primary beneficiaries of this trend, with secondary and tertiary impacts beginning to emerge, supporting their tech bull thesis for 2024/2025.
Wedbush predicts that over the next three years, more than 70% of enterprises will adopt AI use cases, leading to an estimated $1 trillion in incremental AI spending over the next decade.
For Apple, the AI opportunity is twofold, according to Wedbush’s analysts.
The rollout of its AI strategy could trigger a significant iPhone upgrade cycle among its massive user base, and developers will create numerous apps on Apple's AI platform, effectively building a new AI App Store in the coming years. Analysts believe this "will be the main way that consumers interact with generative AI.”
“While Apple has been late to the game on AI with the biggest consumer installed base in the world, Cook & Co. have a unique advantage to monetize the AI Party in this 1995 Moment,” wrote Wedbush’s team.