Will Apple Reclaim Its Title as the Largest Company in the World by Market Cap? The Answer May Surprise You.

Core Viewpoint - Apple's reign as the largest company by market capitalization has ended, with Microsoft and Nvidia surpassing it due to their growth in cloud computing and AI sectors [1][2]. Group 1: Growth Comparison - Microsoft has experienced a revenue growth of 36% over the last three years, while Nvidia's revenue has surged over 300%. In contrast, Apple's revenue has only increased by 3.3%, significantly lagging behind inflation [4]. - The trend of slower growth for Apple is expected to continue, as it has not capitalized on the booming AI and cloud computing markets, which are driving growth for competitors like Microsoft and Nvidia [5]. Group 2: Valuation Analysis - Apple's trailing price-to-earnings (P/E) ratio stands at 31, which is lower than Microsoft's 35 and Nvidia's 46, suggesting that Apple stock may appear cheaper [6]. - However, the higher P/E ratios of Microsoft and Nvidia are justified due to their faster earnings per share (EPS) growth compared to Apple, which has seen minimal EPS growth in recent years [7]. Group 3: Future Earnings Risks - Apple's EPS may decline in the coming years due to antitrust lawsuits affecting its high-margin services and software revenue, including a ruling that the App Store operates as a monopoly [8]. - The ongoing legal challenges against Google, which could jeopardize Apple's significant payment for default search engine status, may further impact its earnings potential [8]. Group 4: Market Position Outlook - It is deemed unlikely that Apple will reclaim its position as the largest company by market cap, as it lacks significant growth avenues, while Nvidia is achieving a 69% year-over-year revenue growth [10].