There is a huge market opportunity for both companies.
Not a day goes by without hearing or reading about NVIDIA. The company powering the artificial intelligence (AI) revolution is currently valued at over $2.8 trillion, the third largest market cap in the world. Investors are betting big on the company’s continued growth, with the stock currently valued at a premium price-to-earnings (P/E) ratio of 63.
Optimism is growing, but I think it’s time to zig while others are zigging. Below are two stocks with lower market caps than Nvidia but that we think will surpass it by 2030.
Alphabet: A real AI winner?
alphabet (Google 0.96%) (Google 1.03%) It is the fourth largest company in the world by market capitalization, behind only Nvidia. With Google Search, YouTube, and Google Cloud, the company has dominated the consumer internet market for much of the 21st century. With billions of users worldwide using Google and YouTube regularly, the company is a leader in digital advertising.
Last quarter, Google Search revenue grew 14% year over year, YouTube advertising revenue grew 13%, and Google Cloud revenue grew 29%. This impressive growth across the board helped the company’s operating profit reach a record high of $98 billion over the past 12 months, significantly surpassing Nvidia, which had operating profits of less than $50 billion.
Investors may have been afraid to invest in Alphabet due to rumors that the company was lagging behind in AI. In late 2022, OpenAI launched ChatGPT for the public and subsequently received a huge investment from Microsoft. For a while, it looked like Alphabet was losing the race for new conversational and creative AI tools.
Now, the company has demonstrated the ability to replicate and even surpass all of OpenAI’s innovations, which should give investors some peace of mind.Currently, Google and Alphabet appear to have the overall lead in AI.
There’s still plenty of room for growth as internet usage increases worldwide and cloud computing expands its market share, as well as potential from new AI tools built into new devices like the Pixel smartphone. With strong current revenues and a long way to go, I think the company has a very good chance of surpassing Nvidia in market cap by 2030.
GOOG Operating Profit (TTM), data from YCharts. TTM = Trailing 12 Months.
Amazon: Repeatedly
Amazon (AMZN -0.30%) The company ranks sixth on the list of the world’s largest companies with a market capitalization of $1.8 trillion. Its dominance in e-commerce and cloud computing has allowed it to continue growing at such a large scale.
Revenues over the past 12 months have reached $600 billion, up from roughly $100 billion a decade ago. And revenues show no signs of slowing, with last quarter’s revenues up 10% year over year.
Profitability has always been a concern for Amazon, but new CEO Andy Jassy has eased those concerns. The company’s operating margins have risen to a record 9% over the past 12 months, hitting 10% last quarter. Consolidated margins are only likely to rise as higher-margin advertising, subscription, and third-party e-commerce services grow.
Compared to Nvidia, which already boasts extremely high margins, Amazon can grow its revenue at an astounding pace by expanding its underlying margins and growing its top line.
Amazon already has larger operating profits than NVIDIA. Assuming that Amazon can achieve $1 trillion in sales and a 15% operating margin by 2030, its operating profits will jump to $150 billion by the end of the century, which would make Amazon’s market capitalization larger than NVIDIA’s in 2030.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, 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. Bret Schafer has invested in Alphabet and Amazon. The Motley Fool has invested in and recommends Alphabet, Amazon, 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.
