Apple (NASDAQ: AAPL) recently triumphed as the world’s most valuable enterprise once again, boasting a market cap of $3.57 billion. Over the past three years, its stock gallivanted upward by over 60%, defying market apprehensions amid harder macro and competitive challenges.
From fiscal 2023 (culminating in September) to fiscal 2026, analysts foresee Apple’s revenue ascending at a compound annual growth rate (CAGR) of 5%, while its earnings per share (EPS) scales up at a CAGR of 10%. This ascension is expected to be fueled by a cyclical rebound in iPhone sales, widening into swiftly growing markets like India, and the progression of Apple’s subscription domain, catering to over a billion subscribers. Furthermore, Apple is likely to incorporate a hefty yearly share repurchase to bolster its EPS.
Image source: Apple.
With these growth rates, Apple emerges as a steady, long-term investment. Yet, these metrics may fall slightly insipid for a stock trading at 35 times forward earnings and 9 times this year’s sales. Therein lies the possibility of Apple’s valuations being unduly inflated by the recent buzz surrounding its generative AI prospects for its proprietary apps. If Apple meets the expectations of Wall Street and sustains the same price-to-sales ratio come fiscal 2026, its market cap could burgeon by approximately 12% to $4.01 billion by the climactic year.
While this market cap would still position Apple among the world’s elite, the assertion is made that three trillion-dollar comrades—Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)—may outshine Apple’s valuation within the next triennium.
Distinctions Among the Tech Titans
Apple, Nvidia, Microsoft, and Alphabet each operate unique business models. Apple garners over half its revenue from the iPhone, relying on services for incremental growth. Nvidia primarily generates revenue through the sale of high-end data centers for processing AI workflows.
Microsoft derives over half its revenue from cloud services—embracing Azure cloud infrastructure, Office 365 productivity tools, and Dynamics CRM. Alphabet thrives on the proceeds from Google’s advertising empire, featuring search and display ads, its ad network, and the YouTube platform. However, the Google Cloud division is ascendant, showing faster growth than its core advertising segment.
All four entities have been expanding their generative AI frameworks. Apple recently integrated OpenAI’s ChatGPT into its apps and unveiled new generative AI attributes for image creation and text composition. Microsoft, as a key OpenAI investor, incorporates the firm’s generative AI tools into its cloud services.
Alphabet has been enhancing its Gemini generative AI system to remain competitive with OpenAI, deploying these tools across its expansive ecosystem. Nvidia enjoys spoils from this secular trend by providing premier “picks and shovels” for the AI gold rush.
Burgeoning Growth Beyond Apple
Of the quartet, only Apple banks primarily on sales from the slower-growth and cyclical consumer electronics space. Nvidia thrives as a high-growth chip innovator, Microsoft advances as a dominant cloud and AI contender, while Alphabet excels as a digital advertising titan. Consequently, analysts anticipate all three firms to outpace Apple in growth over the ensuing 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 |
9 |
|
Nvidia |
46% |
53% |
$3.26 billion |
28 |
|
Microsoft |
15% |
17% |
$3.47 billion |
14 |
|
Alphabet |
11% |
20% |
$2.37 billion |
7 |
Data source: MarketScreener.
Should these projections materialize and price-to-sales values remain constant, Nvidia could ascend to $5.3 trillion by fiscal 2027, Microsoft might hit $4.5 trillion by fiscal 2026, and Alphabet’s market cap could crest $3 trillion. However, with the same price-to-sales metric as Microsoft, Alphabet’s market cap could soar close to $6 trillion, thus positioning all three tech heavyweights to potentially surpass Apple’s market cap within the next three years.
Peer Beyond the Market Capitalizations
Thoroughly tracking the market caps of the planet’s largest corporations serves as a surface-level approach, glossing over their distinct assets and weaknesses.
All four of these “Magnificent Seven” enterprises are poised for continuation in growth. Apple remains a stalwart in the mobile computing sphere, Microsoft and Google transition into cloud and AI dominions, while Nvidia retains its crown as the premier AI accelerator chip producer. Hence, rather than conjecturing about which tech behemoth will reign supreme in three years, investors should concentrate on their capacity to extend their ecosystems, fortify their competitive positions, and generate sustainable growth.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Leo Sun holds positions in Apple. The Motley Fool also retains positions in and recommends Alphabet, Apple, Microsoft, and Nvidia. Additionally, The Motley Fool advises long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool adheres to a strict disclosure policy.