Key Points
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Nvidia’s record close on Oct. 5 put its market cap around 4% below $6 trillion.
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Apple’s stock lost 31% over the year after it first hit $3 trillion.
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Nvidia’s adjusted earnings per share climbed 120% year over year for its latest quarter.
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Shares of Nvidia (NASDAQ:NVDA) ended Monday, Oct. 5, at $238.90, a fresh record close. At that price, the artificial intelligence (AI) chip giant is worth around $5.8 trillion — about 4% shy of $6 trillion, a level no company has ever hit.
Milestones like this usually make headlines. But I don’t think they say much about what a stock does next.
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Five times, a company has become the first in the U.S. to reach a new trillion-dollar level: Apple (NASDAQ:AAPL) at $1 trillion, $2 trillion and $3 trillion, and Nvidia at $4 trillion and $5 trillion. In the following 12 months (11 so far, for the last one), the stock’s return ranged from a 31% loss to a 27% gain. And it beat the S&P 500 (SNPINDEX:^GSPC) just twice.
What mattered more, every time, was what happened to earnings — and to the price investors would pay for them.
Image source: Nvidia.
Apple’s milestones went three different ways
For each one, I measured from the close on the day the stock first reached the milestone during trading, out to a year later.
Apple first crossed $1 trillion on Aug. 2, 2018. In the next 12 months, its shares fell around 2% but the S&P 500 gained about 4%. In early January 2019, Apple cut its revenue outlook for the December quarter to about $84 billion, saying iPhone upgrades came in lower than it expected.
The $2 trillion level, hit on Aug. 19, 2020, came just before a boom year for the business. Apple’s earnings per share soared 71% for its fiscal 2021, which ended in late September 2021. Still, the stock’s 27% rise in the next 12 months lagged the index’s 31% return.
One reason is the price. Investors paid around 35 times earnings when Apple touched $2 trillion, and about 29 times earnings a year later.
Then came $3 trillion, on Jan. 3, 2022. Apple’s earnings per share still rose 9% for fiscal 2022. But its price-to-earnings ratio dropped from around 32 to about 20 over the next year, and the stock lost 31%. The S&P 500 fell 20% over the same stretch.
Nvidia’s business outran its stock
Nvidia’s own milestones have gone better so far. It first hit $4 trillion on July 9, 2025, and its shares rose around 25% in the next year, ahead of the S&P 500’s 20% gain.
Since first crossing $5 trillion on Oct. 29, 2025, the stock is up around 15% as of this writing, again a bit ahead of the index in those 11 months.
But the business did much more of the climbing. Showing how fast Nvidia grew after its $4 trillion day, revenue in the fiscal second quarter of 2027, which ended July 26, 2026, rose 106% year over year to $96.2 billion. Growth was 85% the quarter before, so the pace sped up.
Non-GAAP (adjusted) earnings per share grew even faster, rising 120% to $2.22.
Put another way, the shares gained a fraction of what earnings did, because investors paid less for each dollar of those earnings. This happened after all five milestones. Every time, the stock’s price-to-earnings ratio was lower a year later than when it crossed the line (11 months later, for Nvidia’s $5 trillion mark).
What decided each return was how fast earnings rose to make up for it.
What drives the stock from here?
Nvidia’s earnings look set to keep growing quickly, at least for now. Management expects revenue of around $108 billion in the fiscal third quarter, give or take 2%. This would be almost 90% more than the $57.0 billion Nvidia brought in during the same quarter a year before — still impressive, but slower than last quarter’s rate.
Investors arguably aren’t paying much for that growth. Shares trade at around 15 times expected earnings for fiscal 2028 (which ends in January 2028), using analysts’ consensus estimate. For a company whose earnings per share more than doubled last quarter, that price looks low to me.
Of course, over 90% of Nvidia’s revenue last quarter came from its data center business, which depends on how much customers spend building out AI. A cut in this spending could slow Nvidia’s earnings quickly. If this happens as its price-to-earnings multiple keeps shrinking, the stock could see a year like Apple’s after $3 trillion.
In the end, I wouldn’t make much of $6 trillion, if and when Nvidia gets there. As long as its earnings keep rising faster than its valuation multiple shrinks, the stock can keep climbing. At this price, I think the odds favor that result for now.
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Daniel Sparks and his clients have positions in Apple. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.
