Thanks to their lucrative end markets, these two fast-growing tech giants could overtake the world’s second-largest company in the long term.
Microsoft is the second-largest company in the world, with a market capitalization of just under $3 trillion as of this writing. The tech giant achieved this position due to its strong presence across multiple applications, including cloud computing, the popular Windows operating system, and workplace collaboration tools.
Artificial intelligence (AI) has recently become another solid growth driver for Microsoft, helping the company accelerate its growth in recent quarters, but Microsoft isn’t the only tech giant using AI as a growth lever. Nvidia (NVDA 4.08%) and Meta Platform (Meta -0.35%) They are also benefiting from the rapid adoption of AI in their respective industries.
Let’s take a closer look at Nvidia and Meta Platforms’ prospects over the next decade and explore why they could overtake Microsoft’s market cap in the long term.
1. NVIDIA
Nvidia is currently the world’s third-largest company after Microsoft, with a market capitalization of $2.56 trillion. The semiconductor specialist’s shares have risen significantly since the end of 2022, when it became clear that its datacenter graphics processing units (GPUs) would play a central role in the widespread adoption of AI.
Microsoft partner OpenAI used Nvidia’s GPUs to train ChatGPT, a generative AI chatbot that exploded in popularity after its launch in late 2022. Since then, tech giants around the world have been clamoring to buy Nvidia’s AI GPUs for training and deploying AI models, giving the chipmaker control over 80% of the AI chip market, leaving little for rivals such as AMD.
KeyBanc Capital Markets analyst John Vinh predicts that Nvidia could generate a staggering $200 billion in data center revenue next year, driven by reportedly stronger-than-expected demand for its next-generation Blackwell AI chips — a big increase on the $47.5 billion in data center revenue Nvidia reported last year.
Meanwhile, consensus estimates indicate that Nvidia’s data center revenue could grow to $140 billion next year, which would be a big increase from last year’s revenue from the segment. For comparison, AMD expects to sell $4.5 billion worth of data center GPUs this year, giving Nvidia a leg up in this market.
Nvidia is likely to continue to hold a solid share of the AI chip market into the decade, as it will be releasing new AI GPUs every year, compared to its previous plan of refreshing its lineup every two years. According to Future Market Insights, the overall GPU market is expected to reach $1.16 trillion in 2034, and Nvidia’s strong position in this market will translate into robust growth for the next decade.
Additionally, analysts expect Nvidia’s revenue to grow at a 42% annual rate over the next five years, which is faster than the 13% annual revenue growth rate that Microsoft is expected to achieve over the same period.
Nvidia’s huge end market opportunity and dominant market share suggest that the company could continue to grow at a faster pace than Microsoft over the next five or even ten years, so it wouldn’t be surprising to see Nvidia eventually overtake Microsoft’s market cap in ten years’ time.
2. Meta Platform
Meta Platforms is currently the seventh largest company in the world with a market capitalization of $1.25 trillion, a fair distance behind Microsoft. However, due to the growing adoption of its AI-powered advertising tools, Meta has seen impressive growth recently and is likely to maintain a healthy growth pace for the next decade.
According to eMarketer, digital ad spending could grow 13.2% in 2024. Meta is on track to grow at a faster pace than the industry it operates in. The company’s revenue in the first half of the year grew 24% to $75.5 billion. Revenue forecast for the current quarter is $39.75 billion, a 16% increase year over year and above this year’s forecast growth in digital ad spending.
Meta’s ability to increase advertiser margins through AI-powered ad campaigns has helped it win ad dollars: In a recent earnings call, management said that U.S. advertisers have seen a 22% increase in margins since adopting Meta’s AI-powered ad tools, such as Advantage+.
These AI tools enable advertisers using Meta’s products to better target their audiences, drive more purchases from those audiences, and reduce acquisition costs. Meta saw a 10% year-over-year increase in delivered ad impressions in Q2 and a 10% improvement in average price per ad.
The global digital advertising market is expected to grow from an estimated $467 billion in revenue this year to $1.76 trillion in 2034, according to Prophecy Market Insights. Meta is expected to generate $161 billion in revenue in 2024, meaning the company could control a third of the digital advertising market by the end of the year.
Longer term, if the company can continue to capture a larger share of this lucrative end-market opportunity, its revenues could grow significantly in the future. Assuming Meta can increase its digital advertising market share to 40% in 2034, its revenues could reach a staggering $704 billion, more than four times the company’s projected 2024 revenues.
Given that the US technology sector trades at a price-to-sales multiple of 7x, Meta’s market capitalization could grow significantly in the long term if it were to trade at that valuation, which could see Meta Platforms become a bigger company than Microsoft over the next decade due to its growing influence in the digital advertising market.
Randi Zuckerberg is a former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg and is a member of The Motley Fool’s board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Advanced Micro Devices, Meta Platforms, Microsoft, and NVIDIA. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
