With Nvidia Slowing Down, Will Apple, Alphabet, and Tesla Steal the Spotlight in AI?

Nvidia’s stock price has remained sluggish despite its impressive performance metrics. The company’s projected earnings per share (EPS) growth rate for 2025 stands at 133%, a significant figure, though it pales compared to its remarkable 572% growth in 2024. Meanwhile, competitors such as Broadcom (266%) and AMD (117%) are also recording robust growth figures.

JaeMan Lee, an analyst at Hana Securities, predicts that companies positioned to play a significant B2C role in AI—such as Apple (21%), Alphabet (38%), and Tesla (41%)—will gradually narrow their earnings growth gap with Nvidia. Lee advises investors to seek the “next Nvidia.”

From 2010 to 2012, Apple’s stock price surged 110%, driven by strong revenue growth. Similarly, between 2013 and 2015, software companies like Alphabet, which capitalized on hardware sales such as Apple’s iPhone, demonstrated impressive revenue growth and achieved a 100% increase in stock prices.

Lee suggests that the stock market may shift toward a broader rally rather than being dominated by a single leader. He highlights a notable trend in November 2024, when software stocks in the S&P 500 outperformed semiconductor stocks—a significant departure from the usual pattern.

Analysts stress the importance of recognizing the unique characteristics of the domestic stock market during year-end and early-year periods.

Among long-short (L/S) strategies, factors such as low price-to-earnings (P/E) and price-to-book (P/B) ratios have historically performed well in January. However, these same factors tend to underperform in December.

According to Lee, the most effective L/S strategies during both December and January have been linked to operating profit estimates and oversold stocks. He recommends focusing on sectors likely to experience stock price gains driven by upward revisions in profit estimates during this period.

Looking to U.S. economic indicators for clues, improvements in manufacturing and consumer sentiment will likely emerge first. These changes are expected in light of the Federal Reserve’s anticipated interest rate cuts and President Trump’s promises of tax cuts.

Lee points out that a rebound in the U.S. ISM Manufacturing Index or Consumer Sentiment Index can significantly impact stock prices. Of the two, the manufacturing index tends to exert a relatively larger influence. Within the S&P 500, sectors benefiting from upward profit estimate revisions and high stock returns are primarily concentrated in the tech industry—particularly semiconductors, software, and hardware.

Outside the tech sector, capital goods and transportation tend to gain from improvements in the ISM Manufacturing Index, while retail, consumer services, and real estate perform well when the Consumer Sentiment Index improves.

Lee also observes that since 2010, shifts in U.S. economic sentiment have increasingly influenced the Korean stock market (KOSPI). He highlights that semiconductors remain highly sensitive to earnings estimates and stock price movements, making them a key sector to monitor as U.S. manufacturing and consumer sentiment improve.

Since 2020, other sectors—including automotive, machinery, software, shipbuilding, and holding/trading companies (including defense)—have shown even greater sensitivity to changes in earnings estimates and stock returns than semiconductors, suggesting they warrant close attention from investors.