Apple and Nvidia sit within $250 billion of each other in market value, yet one trades at a multiple more than twice as rich as the other. That gap raises a sharp question about which stock carries more risk right now.
Apple and Nvidia sit within $250 billion of each other in market value, yet one trades at a multiple more than twice as rich as the other.
That gap raises a sharp question about which stock carries more risk right now.
Apple and Nvidia sit within $250 billion of each other in market value, yet one trades at a multiple more than twice as rich as the other. That gap raises a sharp question about which stock carries more risk right…
Apple (NASDAQ:AAPL | AAPL Price Prediction) closed Monday, October 19, at $342.94, just under its 52-week high of $348.15. NVIDIA (NASDAQ:NVDA) closed at $217.09, about 11% below its peak of $243.37.
Apple and NVIDIA are worth $5.00 trillion and $5.24 trillion. Yet you pay 37 times expected earnings for Apple and 18 times for NVIDIA, so Apple’s forward multiple is about 2.1 times NVIDIA’s.
Revenue growth points the other way. Apple’s June-quarter revenue rose 16.36%, while NVIDIA’s latest quarterly revenue rose 105.85%.
Trailing Earnings Narrow the Gap
On trailing earnings, Apple trades at 39 times and NVIDIA at 27 times, a gap of about 1.4 times. Forward P/Es rely on analyst estimates, and those estimates differ from one data provider to the next.
NVIDIA’s forward multiple is well below its trailing one because analysts expect EPS to rise from 9.3124 this fiscal year to 15.9146 next year. Apple’s two multiples sit close together, which signals slower expected growth. A multiple is most useful when compared with the growth it is expected to deliver.
Apple’s Premium Pays for Stability
Averytin News Financial update.