Microsoft, Apple, and Nvidia in race to hit $4 trillion market cap - Wedbush

June 17, 2024 7:08 AM EDT -- Microsoft, Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA) will be in a race over the next year to hit a market capitalization of $4 trillion thanks to surging enthusiasm over the capabilities of artificial intelligence, according to analysts at Wedbush.

At the end of trading on Friday, software titan Microsoft (NASDAQ: MSFT)'s market value had stood at $3.29 trillion. The market cap of iPhone-maker Apple's, meanwhile, has reached $3.26 trillion, just outpacing AI-darling Nvidia's valuation of $3.24 trillion.

In a note to clients on Sunday, the Wedbush analysts laid out the case for optimism surrounding each company.

For Microsoft, the analysts argued that AI will help the firm monetize its "massive" base of installed enterprise users over the coming years. Microsoft, which has previously backed ChatGPT-maker OpenAI, has outlined plans to bring AI into a number of fields across the business world with its Copilot offering.

Despite recently being widely considered to be a laggard in the AI race, Apple unveiled a string of AI-powered enhancements to its products at its annual developers conference last week that the Wedbush analysts said could trigger a "super cycle" in iPhone sales.

Finally, the Wedbush analysts said Nvidia's AI-optimized chips are "in essence the new gold or oil in the tech sector" as an increasing number of businesses embrace the nascent technology.

Although they flagged that AI could disrupt near-term sales cycles in some tech stocks, the analysts added the "massive" expected wave of expenditures will not only fuel a new "industrial revolution" in the tech industry but also underpin a broader market rally "well in 2025."

"In a nutshell, we believe this tech bull market has legs that will ultimately broaden out to the rest of software, consumer tech, cyber security, semis, and infrastructure over the next 12 to 18 months," the Wedbush analysts said.

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