Apple is currently the most valuable publicly traded company in the world, with a market value of $3.9 trillion. The company has held that title for the better part of a decade but has yet to demonstrate it can monetize artificial intelligence (AI). Consequently, I think the two AI stocks below can top Apple’s current market value before the end of 2025:
- Nvidia (NVDA 0.39%) is currently worth $3.4 trillion. Its share price would need to increase 17% in the next year for the company to achieve a market value of $4 trillion.
- Alphabet (GOOGL 0.76%) (GOOG 0.81%) is currently worth $2.4 trillion. Its share price would need to rise 67% in the next year for the company to achieve a market value of $4 trillion.
Admittedly, my first prediction is somewhat conservative, and my second prediction is very aggressive. Here’s what investors should know about these AI stocks.
Nvidia: 17% implied upside before the end of 2025
Nvidia has been the foundation of the artificial intelligence (AI) boom. Its graphics processing units (GPUs) are the industry standard in accelerating complex data center workloads, and the company dominates the market for InfiniBand networking, which is currently the preferred connectivity technology for backend networks in AI data centers.
The company reported excellent financial results in the third quarter of fiscal 2025, which ended in October 2024. Revenue increased 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 reach $0.81 per diluted share.
Nvidia has a key catalyst on the horizon in the launch of its Blackwell GPU. Compared to the previous Hopper chip, Blackwell can complete 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 Blackwell sales in the next year.
Morgan Stanley expects spending on cloud AI semiconductors to increase more than 50% next year. That paves the way for robust earnings growth from Nvidia. Indeed, Wall Street expects its adjusted earnings to grow 50% in the next four quarters. That consensus makes the current valuation of 53 times adjusted earnings look cheap.
Nvidia’s stock must reach $164 per share for the company to have a market value of $4 trillion. It will hit that mark if it meets Wall Street’s earnings estimates and shares trade above 42 times earnings, which would be a large discount to the current valuation. Personally, I will be surprised if Nvidia doesn’t blow past $4 trillion in 2025.
Alphabet: 67% implied upside before the end of 2025
Alphabet has two important growth engines in digital advertising and cloud computing. It’s the largest ad tech company worldwide, due to the popularity of Google Search and YouTube. And Google runs the third largest public cloud behind Amazon and Microsoft. In both segments, the company is leaning on AI to create new monetization opportunities.
Those efforts led to encouraging financial results in the third quarter. Revenue increased 15% to $88 billion, a sequential acceleration from 14% growth in the previous quarter. Operating margin expanded 4 percentage points as the company continued to reengineer its cost base, and GAAP net income increased 37% to $2.12 per diluted share.
Wall Street expects earnings to increase 15% in the next four quarters. That estimate, divided into the current valuation of 25 times earnings, gives a price-to-earnings-to-growth (PEG) ratio of 1.8. That’s a significant discount to Microsoft’s PEG ratio of 4, but I think the market will afford Alphabet a higher multiple once it has more visibility into regulatory issues.
To elaborate, a federal judge in August ruled that Alphabet acted illegally to keep its monopoly in internet search, and the Justice Department wants Alphabet to sell its Chrome browser. That would almost certainly hurt its search market share, which likely explains the valuation discrepancy between Alphabet and Microsoft. In other words, Alphabet may have a higher multiple if not for regulatory issues.
However, Federal Judge Amit Mehta will make a decision regarding the remedy in August 2025, so the regulatory headwinds may be resolved before year-end. Many analysts think the fix will be less severe than what the Justice Department has proposed because (1) historical precedent makes a breakup unlikely, and (2) the Justice Department may seek a less extreme solution under President-elect Donald Trump.
In that scenario, I think the market could afford Alphabet a PEG ratio of 2.6. That implies a share price of $326, based on projected earnings of $8.96 per share in 2025, which implies a market value of $4 trillion.
Many things would need to go right for Alphabet to hit that mark next year, but patient investors should feel comfortable buying a position today either way.
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 Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in 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.
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