The country rose above several oil giants to first place in 2011 and has not disappeared from the Top 3 since. Apple isn’t always the top dog, and is occasionally passed over by fellow tech giants such as Nvidia (NASDAQ: NVDA) or Microsoft (NASDAQ: MSFT) for a while, but it never strays far from first place. And at the time of writing, it is back on the throne with a market cap of $3.54 trillion as of November 25.
I’m not saying that the iPhone will go out of style and that Apple stock will drop in the rankings over the next decade. However, I can certainly imagine that a few currently smaller names will become more valuable than Cupertino’s best in about ten years. Read on to see why I expect this Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) And Amazon (NASDAQ: AMZN) to snatch away Apple’s market cap crown over time.
First of all, I have to assume that Apple’s record stock gains will decline in the coming years. Otherwise, Amazon and Alphabet would have a hard time catching up. After all, they start a few steps behind the current leader:
Data found on YCharts and Finviz, 11/25/24.
Apple did not find its leading market position in a box of cereal. Despite faltering sales of iPhones and iPads, the company has maintained a solid base in hardware sales in recent years, combined with sharply increasing software and service revenues. This trio has stayed pretty close since 2020, but Apple always seems to find a way back up.
My somewhat bearish position is that Apple is running out of truly innovative ideas. I know, you’ve heard it all before: iPads are just bigger iPhones without phone service, the lucrative Apple ecosystem is bad for customers, high prices don’t always reflect superior products, and so on. Apple bears have been saying this for years, but guess who is still the most valuable company in the world?
Still, Apple has seen more misses than home runs lately. The Apple Vision Pro virtual reality headset never found a market and is reportedly being discontinued after less than a year. The last series of product introductions mainly consisted of slightly faster iPhones, MacBooks and iPads with more memory. Only time will tell if Apple Intelligence’s acclaimed suite of artificial intelligence (AI) features will make a difference. Be that as it may, Apple has not taken the lead in the generative AI era.
Sorry if I’m boring you to sleep with age-old Apple criticism. However, they seem more valid than ever. And a lack of exciting innovation is my main point here.
So I wouldn’t be surprised if Apple’s rocket engines run out of fuel relatively quickly and outpace the market. The company certainly has the budget and technical talent to prove me wrong; however, the proof is in the fruit-flavored pudding.
Why should Amazon outperform Apple by a wide margin over the next decade? The innovation lacking in the current leader is in abundance at Amazon.
What started as a simple (but at the time groundbreaking) online bookstore has grown into a dominant e-commerce in North America. The cloud computing platform Amazon Web Services (AWS) was also groundbreaking and remains the clear market leader 18 years later. The company has also built a shipping network that excels FedEx And UPS In many ways, automated its warehouses before AI was cool, and brought Alexa-powered digital assistants to millions of homes. That’s not a complete list either. These are just some of the most obvious business revolutions that this remarkable company has introduced, off the top of my head.
Amazon’s innovation isn’t slowing down either. The company is always looking for new and unique benefits. This attitude should see the stock continue to rise in the long term, likely exceeding Apple’s market value in a few years.
Here’s another unstoppable innovator. Alphabet is still powered almost exclusively by its Google division, which leads the global market for online search and advertising. That segment also includes the family of Android mobile devices, which has a 70% global market share thanks to a vast network of device building partners. Oh, and don’t forget YouTube, the world’s most popular digital video platform with more viewing hours than industry giant Netflix.
These operations (and more) are technically part of Alphabet’s Google division. That would be good enough for most tech giants, but Alphabet wants more. If and when online search and advertising go out of fashion forever – and I’m sure someday it will – Alphabet will want to have another company ready to drive the entire business forward.
Early contenders include medical research, a fiber-optic internet provider, a fleet of self-driving taxis, and of course, a plethora of AI-based services. I skipped the Google Cloud platform in the last paragraph, but that’s another Google-branded company pulling its weight in the AI ​​era.
Technology-driven changes have a nasty habit of reshaping the global consumer market every now and then. Before AI and smartphones, there were personal computers and video tapes. The list goes on, probably beyond Neanderthals. There’s simply no way to stop progress in the long term, but true winners will know how to stay relevant in a different market. That’s what Alphabet is aiming for, and another area where Apple appears to be falling short.
So if you look at the biggest companies in 2034, I expect Alphabet and Amazon to outpace Apple for good. Once again, Apple could prove me completely wrong, and I’d love to see the tech giant reignite its faded innovative fire one day. Until then, I would much rather own shares of Alphabet and Google.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, Amazon, Netflix and Nvidia. The Motley Fool holds positions in and recommends Alphabet, Amazon, Apple, FedEx, Microsoft, Netflix and Nvidia. The Motley Fool recommends United Parcel Service and recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
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