Apple is currently the most valuable publicly traded company in the world, with a market value of $3.9 trillion. The company has held this title for nearly a decade, but has yet to demonstrate that it can monetize artificial intelligence (AI). Therefore, I believe the two AI stocks below can surpass Apple’s current market value before the end of 2025:
Nvidia (NASDAQ:NVDA) is currently worth $3.4 trillion. Its stock price would need to rise 17% over the next year for the company to reach a market value of $4 trillion.
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is currently worth $2.4 trillion. Its stock price would need to rise 67% over the next year for the company to reach a market value of $4 trillion.
Granted, my first prediction is somewhat conservative and my second prediction is very aggressive. Here’s what investors should know about these AI stocks.
Nvidia was the foundation of artificial intelligence (AI) boom. Its graphics processing units (GPUs) are the industry standard for accelerating complex data center workloads, and the company dominates the InfiniBand networking market, which is currently the preferred connectivity technology for back-end networks in AI data centers.
The company reported strong financial results in the third quarter of fiscal 2025, which ended October 2024. Revenue grew 94% to $35 billion on particularly strong momentum in the data center segment, supported by strong sales growth in the automotive and robotics segment. Meanwhile, non-GAAP net income doubled to $0.81 per diluted share.
Nvidia has a key catalyst on the horizon with the launch of its Blackwell GPU. Compared to the previous Hopper chip, Blackwell can perform AI training tasks up to four times faster and AI inference tasks up to 30 times faster. The production ramp-up began in the current quarter, so Nvidia should see substantial sales from Blackwell over the next year.
Morgan Stanley expects spending on cloud AI semiconductors to increase by more than 50% next year. This sets the stage for solid earnings growth from Nvidia. Indeed, Wall Street expects its adjusted profit to increase 50% over the next four quarters. This consensus makes the current valuation of 53 times adjusted earnings look cheap.
Nvidia’s stock needs to hit $164 per share for the company to have a market value of $4 trillion. It will achieve that goal if it meets Wall Street’s earnings estimates and shares trade above 42 times earnings, which would represent a significant discount to the current valuation. Personally, I would be surprised if Nvidia doesn’t exceed $4 trillion in 2025.
Alphabet has two important growth drivers: digital advertising and cloud computing. It is the largest ad tech company in the world, due to the popularity of Google Search and YouTube. And Google manages the third largest public cloud behind Amazon And Microsoft. In both segments, the company leverages AI to create new monetization opportunities.
These efforts led to encouraging financial results in the third quarter. Revenue rose 15% to $88 billion, a sequential acceleration from the previous quarter’s 14% growth. Operating margin increased 4 percentage points as the company continued to reorganize its cost base, and GAAP net income increased 37% to $2.12 per diluted share.
Wall Street expects profits to rise 15% over the next four quarters. This estimate, divided into a current valuation of 25 times earnings, gives a price-to-earnings-to-growth (PEG) ratio of 1.8. This represents a significant reduction from Microsoft’s PEG ratio of 4, but I believe the market will offer Alphabet a higher multiple once it has more visibility on regulatory issues.
To elaborate, a federal judge ruled in August that Alphabet acted illegally to maintain its monopoly in Internet search, and the Justice Department wants Alphabet to sell its Chrome browser. This would almost certainly hurt its search market share, which likely explains the valuation gap between Alphabet and Microsoft. In other words, Alphabet could have a higher multiple if not for regulatory reasons.
However, Federal Judge Amit Mehta will make a decision on the remedy in August 2025, so the regulatory hurdles could be resolved before the end of the year. Many analysts believe the solution will be less severe than that proposed by the Justice Department because (1) historical precedent makes a break unlikely, and (2) the Justice Department may seek a less extreme solution under President of President-elect Donald Trump.
In this scenario, I think the market could allow Alphabet a PEG ratio of 2.6. This implies a stock price of $326, based on projected earnings of $8.96 per share in 2025, implying a market value of $4 trillion.
A lot would have to go right for Alphabet to reach that goal next year, but patient investors should feel comfortable buying a position today anyway.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Trevor Jennevine has positions at Amazon and Nvidia. The Motley Fool holds positions and recommends Alphabet, Amazon, Apple, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
