NVIDIA (NVDA) vs. Apple (AAPL): Which Stock Wins the Valuation Race? Sanmit Amin Wed, October 7, 2026 at 1:19 AM EDT 6 min read NVDA AAPL Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
NVIDIA Corporation (NASDAQ:NVDA) is now worth more than Apple Inc. (NASDAQ:AAPL), but investors are paying far less for each dollar of its expected earnings. With Nvidia at a $5.77 trillion market cap and 24.88x forward earnings, compared with Apple's $4.86 trillion valuation and 35.21x multiple, the question is not simply which company is cheaper.
At those valuations, Nvidia's multiple implies roughly $232 billion of forward earnings, while Apple's implies around $138 billion. In other words, the market is already expecting Nvidia's earnings to be dramatically larger. Yet Nvidia still trades at about a 29% discount to Apple's forward P/E.
That looks strange until you look at what is happening underneath the numbers.
In July, we published an article about high-growth, wide-moat stocks to buy. NVIDIA ranked second on that list. The #1 stock in that list returned more than 30% since the article was published, less than 3 months ago.
NVIDIA Corporation (NASDAQ:NVDA) is no longer just selling graphics processors. It is trying to become the infrastructure layer for the AI industry. Its customers can use Nvidia across training, inference, and newer workloads involving AI agents, rather than buying a chip designed for one specific task.
The bigger advantage is the rest of the system around the GPU. Nvidia now sells networking, CPUs, systems, and software alongside its accelerators. CUDA, the software platform that lets developers build and run applications on Nvidia hardware, is another important piece. The result is that customers are increasingly buying an entire computing platform instead of a chip.
Management's latest commentary shows how far this has gone. Nvidia said its revenue opportunity per gigawatt of data-center capacity has risen from about $18 billion with Hopper to $25 billion with Blackwell and about $40 billion with its next-generation Vera Rubin platform. It also expects fiscal 2028 revenue to grow roughly 70%, with supply rather than demand limiting that outlook.
Nvidia's opportunity is also becoming broader. Hyperscalers remain important, but enterprises, sovereign governments, AI startups and specialized cloud providers are becoming a much larger part of the business. Nvidia says its non-hyperscaler data-center business could represent roughly half of the segment over time.
The AI infrastructure boom requires massive amounts of spending, and some of Nvidia's biggest customers are developing their own chips. OpenAI, Google, Amazon, and others have reasons to reduce their dependence on Nvidia over time. Reuters has also reported that AMD is increasingly trying to challenge Nvidia in AI with its own hardware and software ecosystem.
Nvidia therefore needs the AI market to keep expanding faster than its customers can replace Nvidia's products.
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Its advantage is not about owning the most important piece of AI infrastructure. It is the ecosystem around more than 2.5 billion active devices, which gives Apple a huge installed base to sell hardware, subscriptions, and services to. Services generated $30.7 billion in the latest quarter, and Apple now has more than 1.5 billion paid subscriptions across its services, giving it another way to monetize the massive installed base.
That business is remarkably durable. The question is growth.
Apple's latest quarter was excellent, with revenue up 16% and iPhone revenue up 22%. But management expects September-quarter revenue growth of only 9% to 11%. At 35.21x forward earnings, investors are paying a substantial premium for a company whose core business is already mature.
The biggest potential catalyst is AI. Apple has a massive distribution advantage because it can put AI directly into devices people already own. But the company is still proving that advantage can turn into meaningful financial growth. Siri AI remains in an early rollout, and Apple itself said it is still working through the economics of compute costs and potential monetization through iCloud+.
Apple Inc. (NASDAQ:AAPL) also faces a more immediate issue: higher memory costs and supply constraints are pressuring its hardware business. The company expects memory prices to keep rising, while September-quarter supply constraints are affecting the iPhone, Mac, and iPad.
At this price, Nvidia seems to have the stronger valuation setup.
That does not mean Nvidia is the safer company. Apple has a more mature ecosystem and a business that is easier to understand. Nvidia's earnings are tied to an AI infrastructure cycle that eventually has to prove it can sustain itself.
But valuation is about more than which company is safer.
Nvidia is already larger than Apple, yet investors are paying roughly 29% less for its expected earnings. More importantly, Nvidia is growing much faster and is still expanding the amount of AI infrastructure it can monetize.
Apple needs AI to add another leg to a very mature growth story. Nvidia needs AI spending to remain strong, while continuing to defend its platform against increasingly capable alternatives.
Right now, the market appears to be asking more from Apple than it is from Nvidia.
Nvidia seems to be the winner in the valuation race. At 24.88x forward earnings, the stock is reasonably priced, and yet at an all-time high. Its earnings growth is doing much more work to justify the multiple. Apple is the better-known and arguably more predictable business, yet 35.21x forward earnings leaves less room for disappointment.
Hedge fund sentiment toward Apple remained broadly stable in the second quarter, while sentiment toward Nvidia strengthened. According to Insider Monkey's database, 169 hedge funds held Apple in Q2, compared with 170 in Q1, while the value of their positions rose from $107.48 billion to $124.80 billion. Nvidia saw its hedge fund ownership increase to 285 funds from 275, with the value of those positions rising from $83.89 billion to $94.67 billion. Overall, hedge funds became more bullish on Nvidia, while their positioning in Apple was relatively unchanged.
While we acknowledge the potential of NVDA and AAPL as investments, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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This article is originally published at Insider Monkey.
