Microsoft (NASDAQ: MSFT) stands as a paragon of stability in the volatile world of finance. Its share price has ascended by 200% over the past half-decade, accompanied by a robust 92% increase in free cash flow.

Boasting a market capitalization surpassing $3 trillion, Microsoft reigns proudly among the top three most valuable companies globally. A tantalizing tidbit – earlier this year, from February to June, this tech juggernaut briefly outshone both Apple and Nvidia (NASDAQ: NVDA) in market cap, briefly claiming the crown.

Amidst the tumult of market dynamics in 2024, the standings of the world’s top five behemoths have pirouetted numerous times. Even through August, Nvidia and Microsoft have engaged in a titanic tussle for the coveted runner-up spot practically on a weekly basis. Meanwhile, Amazon (NASDAQ: AMZN) appears galloping on a bullish trajectory that could potentially catapult it past the Windows magnate in the imminent years.

Nvidia and Amazon, fueled by stratospheric earnings, are currently following exhilarating growth trajectories. These powerhouses are reigning supreme in their respective domains, reaping the rewards of substantial investments in the profitable artificial intelligence (AI) sector.

While Microsoft embodies predictability, the trajectories of Nvidia and Amazon are firing at warp-speed, poised to outstrip the stalwart. Here, let’s delve into two growth stocks that are poised to eclipse Microsoft’s valuation in half a decade.

The Ascendancy of Nvidia: Unstoppable Momentum

From the outset of 2023, Nvidia’s operations have been a relentless juggernaut, propelling its stock to a staggering 779% surge. This meteoric climb has propelled it through the ranks of the world’s most esteemed companies, as evinced by the graphic portrayal below.

Data by YCharts

Presently, Nvidia’s market cap surpasses that of Microsoft. Though their positions have flip-flopped multiple times this month, signaling an impending shift yet again by the time you peruse this piece. Nonetheless, Nvidia merits inclusion on this list based on the contention that it will solidify its lead over Microsoft definitively within the next five years.

In the annals of 2024, Nvidia eclipsed Microsoft with its stock rallying by an impressive 159% compared to Microsoft’s modest 10% climb. Over the same period, Nvidia’s quarterly revenue surged by 18% year-to-date juxtaposed with Microsoft’s 4% uptick. At this trajectory, Nvidia could cement its lead over Microsoft much earlier than the anticipated five-year mark.

Nvidia’s astronomical gains are predominantly attributable to its supremacy in AI. The lion’s share, ranging between 70% to 95%, of all AI graphics processing units (GPUs) are architected by Nvidia, the quintessential chips essential for training AI models. Despite forays by rivals like Advanced Micro Devices and Intel via the launch of competing GPUs this year, Nvidia’s head start and commanding $39 billion in free cash flow (in contrast to AMD’s $1 billion and Intel’s unsettling negative $13 billion) portend smooth sailing in its quest to sustain the lead.

In the domain of AI, Microsoft plays a pivotal role in cloud computing. However, industry stalwarts Amazon and Alphabet loom as far more proximate adversaries compared to Nvidia’s GPU competitors.

Nvidia is set to unveil its fiscal 2025 second-quarter earnings on August 28. Following a sustained winning streak in quarterly performances for over a year, the company is anticipated to perpetuate this momentum and present yet another stellar quarter of growth. Consequently, its stock might spike, ferrying it even further ahead of Microsoft.

Amazon: Charting Vast Earnings and the Potential to Surpass its Rivals

In the fiercely contested cloud sphere, Amazon and Microsoft are engaged in a neck-to-neck tussle. By Q2 of 2024, Amazon Web Services (AWS) commanded a 31% market share, as compared to Microsoft Azure’s 25%. Notwithstanding, Amazon upped the ante in its cloud investments over the past year, positioning itself to retain its supremacy in the sector and possibly outstrip Microsoft in market capitalization.

Data by YCharts

Amazon decisively outpaced Microsoft over the past year. Remarkable growth across its retail and AWS segments have propelled Amazon’s profits into the stratosphere, empowering it to infuse billions into its AI endeavors.

In March, Bloomberg unveiled Amazon’s blueprint to splurge nearly $150 billion on data centers over the ensuing 15 years to extend the reach of AWS. With anticipation of a burgeoning demand for AI applications and digital services on the horizon, necessitating a broader cloud expanse. Multiple reports cropping up in recent months corroborate Amazon’s data center investment initiatives, spanning locales in the U.S. like Ohio, Indiana, and Virginia, and on the global stage in spots such as Singapore, Spain, Saudi Arabia, India, and Taiwan.

This expansion will fortify Amazon’s cloud and AI prowess, concurrently empowering a broader spectrum of its operations with generative technology, encompassing e-commerce, grocery, digital advertising, and more.

Despite currently perching at a market cap of $1.8 trillion, Amazon’s earnings and stock are burgeoning at a pace that portends its leapfrogging over Microsoft in the foreseeable future.

Investing $1,000 in Nvidia: Is it Worth it?

Prior to plunging into Nvidia stocks, it behooves one to contemplate:

The Motley Fool Stock Advisor team of analysts recently unearthed what they reckon to be the 10 best stocks in the market for investors at present… and Nvidia remained conspicuously absent from their list. A poignant piece of insight.

Riding the Wave of Potential

Imagine discovering a hidden gem in a chest of treasures. That sensation of finding something extraordinary, something that could potentially transform your world. This exhilarating metaphor encapsulates the thrill of unearthing potential investment opportunities in the stock market.

The Nvidia Phenomenon: A Glimpse into the Spectacular

Let’s rewind the clock to April 15, 2005. Nvidia, the tech behemoth, emerges as a dark horse and secures a coveted spot on the list of promising stocks. Fast forward to today, and the repercussions are staggering. A mere $1,000 investment back then would have burgeoned into a jaw-dropping $792,725. The sheer magnitude of this growth is nothing short of miraculous.

Unveiling Stock Advisor’s Magic

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Steering towards Prosperity

Investors are akin to sailors navigating the tempestuous waters of the stock market. Armed with insights, research, and a dash of luck, they set sail in search of hidden treasures. Much like seasoned sailors, investors who heed the counsel of Stock Advisor are well-equipped to weather the storms and bask in the glory of lucrative returns.

Diving Deeper into the Future

The allure of uncovering the next Nvidia, the next game-changer, is a siren song that beckons investors. As Stock Advisor continues to illuminate the path, investors are primed to chart a course towards newfound prosperity. The echoes of past successes resonate, urging investors to embrace the future with unwavering optimism.