These companies could dethrone Apple from its position as the world’s most valuable company.
Apple is currently the world’s most valuable company with a market capitalization of $3.4 trillion, but two other tech giants, Microsoft (MSFT, 1.64%) and Nvidia (NVDA, 0.69%), are close behind. Both Microsoft and Nvidia have taken turns being the world’s most valuable company this year, but it’s worth noting that a recent surge in their stock price has allowed Apple to reclaim the top spot.
But when you compare Apple’s outlook over the next five years with that of Nvidia and Microsoft, it wouldn’t be surprising if Apple ended up being more valuable than the iPhone maker. Here’s why.
1. Microsoft
Microsoft’s market cap of $3.3 trillion puts it surprisingly close to Apple’s at the moment, and more importantly, it’s growing faster than Apple, a trend that’s likely to continue over the next five years thanks to the increasing adoption of artificial intelligence (AI) in multiple markets.
For example, Microsoft’s revenue for the third quarter of fiscal 2024 (ending March 31) is expected to increase 17% year over year to $61.9 billion, while Apple’s revenue for the second quarter of fiscal 2024 (the three months ending March 30) is expected to decrease 4% year over year to $90.8 billion. The big difference between the performance of these two tech giants is largely due to AI.
Microsoft is capitalizing on several AI-driven growth trends, including cloud computing, personal computers, and workplace collaboration tools, while Apple has been a late entrant into the AI smartphone market. Microsoft’s Intelligent Cloud division reported third-quarter revenue of $26.7 billion, up 21% from a year ago, driven by increased use of cloud-based AI services.
The company noted that its Azure cloud business grew 7 percentage points thanks to AI. The market for cloud-based AI services is projected to generate $647 billion in revenue in 2030, with a compound annual growth rate of nearly 40% over the next decade, giving Microsoft a potentially huge revenue opportunity.
And Microsoft Azure’s 25% share of the cloud computing market means it’s well-positioned to capitalize on the multi-billion dollar AI opportunity. But the AI-driven catalysts don’t end here for Microsoft: The company’s Copilot-generated AI chatbot, which serves both personal and business users, is seeing success.
For example, Microsoft’s Copilot for GitHub, a developer platform used by more than 100 million users, boasted 1.8 million paid subscribers as of the end of March. Meanwhile, enterprise adoption of Copilot for workplace productivity purposes has been strong. CEO Satya Nadella said:
This quarter, we made Copilot available to organizations of all types and sizes, from large enterprises to small and medium sized businesses. Approximately 60% of the Fortune 500 companies are now using Copilot, and adoption is accelerating across industries and geographies, with companies like Amgen, BP, Cognizant, Koch Industries, Moody’s, Novo Nordisk, Nvidia, and Tech Mahindra purchasing over 10,000 seats.
Microsoft charges business customers $30 per user per month for Copilot; a consumer plan costs $20 per user per month, meaning the company is already monetizing the AI assistant market, which is expected to grow eightfold over the next decade and generate nearly $167 billion in revenue by 2033.
The AI-related catalysts above explain why Microsoft’s annual revenue is projected to grow 16% over the next five years, compared to Apple’s projected growth of 10%. This could lead to Microsoft’s stock price rising in the long run, making it more valuable than Apple.
2. NVIDIA
Nvidia is currently the world’s third-largest company with a market capitalization of $3 trillion. Shares of the semiconductor specialist have risen an astounding 745% since the start of 2023 as tech giants such as Microsoft look to acquire the company’s AI graphics processing units (GPUs) to train and deploy AI models and services.
More importantly, Nvidia controls more than 90% of the AI chip market. This staggering market share is the reason for the company’s impressive growth in recent quarters, leading to much better financial performance than Apple.
AAPL Revenues (TTM) data from YCharts.
With the global AI chip market predicted to grow tenfold over the next decade to $300 billion, Nvidia’s impressive growth is likely to continue. Some analysts say the company’s data center revenue alone could jump to $280 billion over the next four years, up from $47.5 billion last year.
Add in additional factors like a recovery in the PC market due to the adoption of AI-enabled PCs (which is beginning to boost Nvidia’s gaming business), and it’s easy to see why analysts are predicting Nvidia’s revenue to grow 46% annually over the next five years — significantly faster than the growth rate Apple is expected to achieve over the same period.
Of course, Apple could get a boost from the launch of its AI smartphone, but investors should keep in mind that the company operates in a highly competitive market. Apple’s smartphone market share in the second quarter of 2024 was 15.8%, down from 16.6% in the same quarter of 2023. Shipments increased just 1.5% year-over-year, but the overall smartphone market grew 6.5%.
It’s easy to see why Nvidia, the market leader in AI chips, is expected to grow faster. Meanwhile, Apple operates in a highly competitive space, with rivals quickly jumping on the AI wave. So it’s not impossible that Nvidia could overtake Apple’s market share in the next five years. And AI will play a central role in helping the semiconductor company get there.
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple, BP, Microsoft, Moody’s, and Nvidia. The Motley Fool recommends Amgen, Cognizant Technology Solutions, and Novo Nordisk and recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
