Apple (AAPL 1.30%) it recently became the most valuable company in the world again with a market cap of $3.57 billion. Its shares have risen more than 60% over the past three years, even as iPhone sales cooled amid tougher macro and competitive headwinds.
From fiscal 2023 (ended last September) to fiscal 2026, analysts expect Apple’s revenue to grow at a compound annual growth rate (CAGR) of 5% while its earnings per share (EPS) to grow at a CAGR of 10%. This growth is likely to be driven by a cyclical recovery in iPhone sales, an expansion into higher-growth markets such as India, and the evolution of Apple’s subscription ecosystem that hosts over a billion subscribers. Apple is also likely to repurchase tens of billions of dollars in shares each year to boost its EPS.
Image source: Apple.
Those growth rates make Apple a solid long-term investment, but they’re a bit weak for a stock that trades at 35 times forward earnings and 9 times this year’s sales. Therefore, Apple’s valuations may have been inflated by the recent buzz about its generative AI plans for its first-party apps. Assuming Apple meets Wall Street’s estimates and still trades at the same price-to-sales ratio through fiscal 2026, its market cap could grow about 12% to $4.01 billion by the end of the year.
That market value would still make Apple one of the most valuable companies in the world, but I believe three of its trillion-dollar peers — Nvidia (NVDA 1.44%), Microsoft (MSFT -0.25%)AND Alphabet (GOOG -0.28%) (GOOGL -0.27%) — could eclipse its rating over the next three years.
The main differences between these titans of technology
Apple, Nvidia, Microsoft and Alphabet operate different business models. Apple generates more than half of its revenue from the iPhone, but it relies on its services business to drive most of its growth. Nvidia generates most of its revenue by selling high-end data centers for processing AI tasks.
Microsoft generates over half of its revenue from its cloud businesses, which include its Azure cloud infrastructure platform, Office 365 productivity services, and Dynamics customer relationship management (CRM) services. Alphabet generates most of its revenue from Google’s advertising business, which includes search and display ads, its ad network and YouTube. However, its smaller Google Cloud business is growing at a much faster clip than its core advertising business.
All four companies have expanded their generative AI ecosystems. Apple recently integrated OpenAI’s ChatGPT into its own apps and announced new generative AI features for creating images and writing text. Microsoft, which is OpenAI’s lead investor, integrates the start-up’s AI-generating tools into its own cloud-based services.
Alphabet has upgraded its generative artificial intelligence platform Gemini to keep up with OpenAI, and is rolling out those tools across its ecosystem. Nvidia capitalizes on this secular trend by selling the best “picks and shovels” for the AI gold rush.
All three tech giants are growing faster than Apple
But of those four companies, only Apple generates the majority of its sales from a slower-growing, cyclical consumer electronics business. Nvidia is a high-growth chip maker, Microsoft is a cloud and AI play, and Alphabet is a digital advertising company. That’s why analysts expect all three companies to grow faster than Apple over the next three years.
|
company |
Estimated Revenue CAGR (next 3 fiscal years) |
Estimated EPS CAGR (next 3 fiscal years) |
Current market capitalization |
Price-to-sales ratio (forward) |
|---|---|---|---|---|
|
Apple |
5% |
10% |
3.57 billion dollars |
9 |
|
Nvidia |
46% |
53% |
3.26 billion dollars |
28 |
|
Microsoft |
15% |
17% |
3.47 billion dollars |
14 |
|
Alphabet |
11% |
20% |
2.37 billion dollars |
7 |
Data source: MarketScreener.
Assuming they match these estimates and their price-to-sales ratios remain stable, Nvidia could be worth $5.3 trillion by fiscal 2027 (which ends in January 2027), Microsoft would be worth $4.5 trillion through fiscal year 2026 (which ends in June 2026). and Alphabet’s market cap could reach $3 trillion. But at the same price-to-sales ratio as Microsoft, Alphabet’s market cap could reach nearly $6 trillion. Therefore, all three tech giants have an opportunity to eclipse Apple’s market cap over the next three years.
But look beyond the market cap
It’s interesting to track the market capitalization of the world’s largest companies, but it’s a superficial approach that glosses over their core strengths and weaknesses.
All four of these “Magnificent Seven” stocks are likely to continue to rise. Apple is a strong investment in the mobile computing market, Microsoft and Google are evolving into cloud and AI companies, and Nvidia is still arguably the best pure play in the AI accelerator chip market. So instead of asking which tech giant will be the most valuable in three years, investors should simply focus on their ability to expand their ecosystems, widen their moats, and generate sustainable growth. .
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 Microsoft calls and short January 2026 $405 Microsoft calls. The Motley Fool has a disclosure policy.