Tech giant Nvidia (NVDA) briefly saw its valuation surpass the $3 trillion mark this week, temporarily dethroning Apple (AAPL) as the second most valuable company in the world. This achievement cements Nvidia's position alongside tech titans Microsoft (MSFT) and Apple as the only companies to have attained such a feat. As Apple and Nvidia engage in a tug-of-war for the second-place spot, questions arise about which company can sustain such an enormous valuation over the long term.

Yahoo Finance's Madison Mills and Seana Smith break down the details.

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This post was written by Angel Smith

Video Transcript

All right.

Well, NVIDIA becoming the third company in history to cross the $3 trillion market cap market this week.

Following Microsoft and Apple, the company also briefly passing Apple to become the second largest company by market cap earlier this week.

But the question is who can hold that position in the long run?

And matty when you take a look at the performance of these two names, really, since the start of the year, we certainly did see uh a bit of discrepancy.

There are a wide gap in terms of the out performance that we saw from NVIDIA in terms of the fact that A Apple was taking a bit to catch up and that was something that played out towards the end of last year as well.

And you can see it up there on your screen just about the excitement surrounding NVIDIA with the stock now up just around 100 and 40% since the start of the year in terms of that out performance.

And the catalyst here for the name, when you talk about Apple specifically, I I think we all know Nvidia's investment story that's not so much changing any time soon.

I think the streets consensus on NVIDIA, there's still reason to be bullish.

She had Bank of America's analysts there coming out earlier this week with the street high price target of $1500 just talking about their continued dominance within the space.

But I think the question for Apple and really that future performance, a lot of that might hinge actually on what we hear at the worldwide developers conference next week and exactly what their plans are for A I, how they're planning to uh incorporate A I technology into their products, specifically the iphone.

And then ultimately, what that's going to do for the upgrade cycle and the demand there for future phones.

So I think that's critical in the Apple investment story and what could potentially be that next catalyst here for shares moving higher?

Well, I feel like you had great insight into this, this week, Shana with your on the ground reporting for us from this tech conference, right?

I feel like you were sending us information from your sources about what they were saying about A I spend and what how to kind of differentiate between the spend that's gonna be useful in the spend that's just thrown.

Yeah.

And, and, and that was so interesting that was through my conversations with uh the new Ceo Rajiv a Ramaswami and then also the founder of pure storage.

And they were basically saying that yes, there is reason right to be so excited about A IA I boom, it is real when you talk about the material impact that it's having on so many of these companies.

But at the same time, there almost needs to be this reality check, right?

Just in terms of what is a realistic timeline when it comes to consumer adoption.

What does this ultimately mean in terms of the impact that it's going to have on people's everyday lives?

And when it comes to that aspect of it, there were some questions raised uh uh B by, by those two executives just about the fact that maybe we have gotten a little too excited at this point and maybe those expectations aren't necessarily realistic.

And as a result of that, we could see some shake out that happens within the industry and specifically the impact that we could see uh on some of those smaller companies, the start up space.

But again, when you take a look at the leaders within A I obviously in video, when you take a look at the leaders overall within the tech space, Apple and you talk about their plans for A I.

There is a reason it seems like to be optimistic at this point.