Text/Yang Jianyong

The combined market capitalization of the top three U.S. stocks (Apple, Microsoft, and NVIDIA) is $9.68 trillion (approximately RMB 68 trillion). Their individual market caps are $3.44 trillion, $3.21 trillion, and $3.03 trillion, respectively. Compared to the GDP of various countries, the combined market capitalization of these three giants is equivalent to the world's third-largest economy, trailing only the United States and China. Additionally, the $3 trillion in market cap of these three companies is on par with the economic output of the United Kingdom and France combined.

Microsoft's success in the capital market is rooted in its generative AI capabilities. Not only has it integrated generative AI into its Office suite, significantly boosting productivity, but with the support of generative AI, Microsoft Azure's market share in the public cloud has continued to increase, gradually narrowing the gap with Amazon. As the world's second-largest public cloud provider, Microsoft generated a total revenue of $105.362 billion from its intelligent cloud business in fiscal year 2024.

Apple's competitiveness lies in its iPhone, which is widely regarded as a bellwether for the global mobile phone industry. Leading the development of smartphones worldwide, Apple enjoys robust competitiveness and is known for its best-selling high-end smartphones. Although under Tim Cook's leadership, Apple has lost some of the innovative spark of the Steve Jobs era, it has yet to introduce a game-changing hardware product or service, primarily relying on its core offerings: the iPhone, iPad, and Mac.

However, it cannot be denied that Tim Cook is a shrewd businessman. Apple's revenue, profits, and market capitalization have soared, making it one of the most profitable companies globally. Its market capitalization has remained at the top of the world for many years, even attracting the attention of Warren Buffett, the legendary investor known for his aversion to technology stocks. Despite selling large amounts of Apple shares, Berkshire Hathaway still held over $1 billion worth of Apple stock as of June 30, 2024. Under Cook's leadership, Apple has entered its prime.

In the era of generative AI, NVIDIA and Microsoft are undoubtedly the biggest winners. NVIDIA provides powerful computing power to support large AI models, with technology giants like Meta and Google relying on NVIDIA's AI platform to enhance their AI capabilities. In other words, the strength of a company's AI capabilities is often determined by how many NVIDIA cards it possesses.

To enhance their competitiveness in the generative AI era, technology giants have invested billions of dollars in purchasing and stockpiling NVIDIA chips. This has led to a shortage of NVIDIA chips, driving up revenue and establishing the company as the world's largest chipmaker. In the second quarter of fiscal year 2025 (ending July 28, 2024), NVIDIA reported record revenue of $30 billion, a 122% increase year-over-year. Data center revenue for the quarter reached $26.3 billion, up 154% from the previous year. Net income was $16.6 billion, a 168% increase from the same period last year.

It is worth noting that not only has NVIDIA's revenue grown exponentially, but its performance in the capital market has also skyrocketed, with its market capitalization exceeding $3 trillion for the second time, reaching $3.03 trillion. Following a three-fold increase in 2023, NVIDIA has continued its upward trajectory this year, with shares up over 130%. Additionally, its daily trading volume averages a staggering $35 billion (approximately RMB 250 billion), making it the world's most actively traded stock. This reflects investors' optimism about the commercial prospects of AI.

Overall, the generative AI wave is a significant driver of technological development, with NVIDIA at its core. The company's high-performance chips play a crucial role in AI applications across various industries. This is due to NVIDIA's commitment to research and innovation, continuously launching new GPU products and technologies to meet the growing demand for AI computing power in the market.

NVIDIA's latest chip, based on the next-generation Blackwell architecture, is poised to become the most powerful AI chip yet. Compared to its predecessor, this chip offers a 3-4 times performance boost and is currently in mass production. According to NVIDIA CEO Jensen Huang, the latest Blackwell AI chip is in high demand. Analysts at Morgan Stanley estimate that NVIDIA will produce 450,000 Blackwell AI GPUs in Q4, potentially generating over $10 billion in revenue.

Of course, there are risks associated with NVIDIA's ability to sustain its high growth trajectory. Technology giants' spending on AI infrastructure cannot continue to soar indefinitely. Consequently, debates have arisen over whether the lofty stock price reflects a bubble.

Finally, generative AI is further advancing the development of artificial intelligence, reshaping various industries, and creating enormous commercial value. It has demonstrated remarkable performance in enhancing customer experience, improving efficiency, facilitating rapid decision-making, and fostering creativity and innovation. As the potential of the AI market gradually unfolds, NVIDIA, with its dominant position in the GPU sector, has successfully seized this market opportunity and achieved rapid growth in its market capitalization.