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New Apple M4 Chip Threatens to Dethrone Nvidia (NVDA) Stock

Source: Eric Broder Van Dyke / Shutterstock.com

One tech leader is gearing up to challenge Nvidia (NASDAQ:NVDA) as a powerful new rival. Indeed, Apple (NASDAQ:AAPL) reportedly wants to produce its own chips for artificial intelligence (AI) software in data centers. According to The Wall Street Journal, the company has been working on this device — internally codenamed Project ACDC (Apple Chips in Data Center) — for years.

Apple hasn’t officially commented on this server project yet. But it recently reminded investors that it’s taking major steps toward cementing its place in the AI race. Today, the tech firm also announced that its M4 system on a chip (SoC) will power the new iPad Pro. AAPL stock closed the day in the green amid growing enthusiasm for the Silicon Valley darling.

Of course, this is good news for Apple. But if the company’s foray into AI and chips continues, Nvidia may finally have an opponent to seriously threaten its market share.

AAPL Stock in the Age of the M4 Chip

Tech enthusiasts would likely have lined up for the new iPad Pro no matter what. But with the added incentive of a powerful new chip helping usher in a new stage of the AI revolution, interest in this sleek new device will be even higher. With that in mind, it’s easy to see why AAPL stock surged today and NVDA stock dipped, as the threat of a dangerous new competitor may be beginning to loom.

What makes the M4 chip special? Apple provided an in-depth overview of why this innovation matters for both investors and consumers:

“[The] M4 has Apple’s fastest Neural Engine ever, capable of up to 38 trillion operations per second, which is faster than the neural processing unit of any AI PC today. Combined with faster memory bandwidth, along with next-generation machine learning (ML) accelerators in the CPU, and a high-performance GPU, M4 makes the new iPad Pro an outrageously powerful device for artificial intelligence.”

This catalyst is likely exactly what Apple needs to bolster to its place as a pillar of Silicon Valley. Despite some recent momentum, AAPL stock remains in the red so far this year and some experts have expressed concern. One analyst at Barclays recently reiterated a “sell” rating on AAPL stock. Still, it’s hard to keep a sector leader down — and Apple has repeatedly proven its resilience and ability to continue innovating.

What Comes Next?

Apple is zeroing in on the next phase of AI technology all while the red-hot artificial intelligence market continues to surge. The company’s new M4 chip could signal a turning point for the tech giant and, as more updates on ACDC are released, AAPL stock may rise even further.

All told, Apple is in an excellent position to secure a piece of this lucrative space.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.

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