This AI Bubble Watch series continues amid the Nasdaq closing at all-time highs. On Tuesday, Apple (AAPL) retook its market capitalization lead over Nvidia (NVDA). AAPL stock gained 7.26%, adding $14.03 and closing at $207.15. It finally broke above the $200 level. It failed to do so in mid-December 2023 and again in late January.
Apple Intelligence, the firm’s response to offering AI, is highly appealing. It is designed to protect the user’s privacy at every step. Moreover, Apple integrates this privacy on iPhone, iPad, and Mac. Markets are equating the security layer to that offered by CrowdStrike (CRWD). Although the technology comparison is not valid, the appearance of getting equivalent security matters the most.
Nvidia continued to trade higher after the 10-for-one stock split. Advanced Micro Devices (AMD), however, lost buying momentum. The stock faces significant selling pressure as AMD stock follows the SMA 50-day line (simple moving average).
AMD stock is expensive compared to NVDA. After posting weak quarterly results, its P/E (price-to-earnings) ratio rose to 232 times. NVDA stock trades at 70.73 times. Microsoft (MSFT) stock trades at 37 times earnings while AAPL stock is at 32.2 times.
Your Takeaway
The AI bubble is becoming a concept and potentially a relic. So long as AI growth continues, the aforementioned stocks will keep rising.
