It wasn’t long ago that investors wondered which stock would be the first to hit $1 trillion in market cap. Today, seven stocks have at least $1 trillion in market cap, and several more are on the way.
But the bar has been raised. A $1 trillion market cap is ho-hum right now. Which stock will be Wall Street’s first $5 trillion stock? Here’s my prediction.
Several worthy contenders
I believe there are several worthy contenders to become the first member of the $5 trillion club. And they share one common denominator: leadership in artificial intelligence (AI).
Microsoft emerged as an AI superstar after partnering with ChatGPT maker OpenAI. The tech giant could have a clear path to a $5 trillion market cap if organizations continue to flock to the cloud to build and deploy generative AI applications.
No company has dominated the AI scene as much as Nvidiaalthough. Demand for Nvidia’s graphics processing units (GPUs) has been staggering, as customers have been buying them in droves to power their AI models. Don’t let the stock’s recent pullback fool you: Nvidia could be on a winning streak again soon.
Some see Google as a parent Alphabet as the underdog in the race to $5 trillion. Antitrust regulators are hounding the company for its market dominance in digital advertising. But I wouldn’t underestimate Alphabet. It’s been an AI pioneer for years and has a particularly big growth opportunity with its Waymo self-driving car unit.
And I wouldn’t be surprised if Amazon is one of the first to break the $5 trillion barrier. Like Microsoft and Google, it is a leader in cloud services (in fact, Amazon Web Services is the largest market leader in this space). The company is also constantly expanding into new arenas, with the planned launch of a satellite internet business being the latest example.
My $5 Trillion Pick
But as much as I like Microsoft, Nvidia, Alphabet, and Amazon, I don’t think any of them will be the first to reach a $5 trillion market cap. Instead, I predict Apple (NASDAQ: AAPL) will be there first.
It certainly helps that Apple has a leg up on the other contenders. The company’s market cap already tops $3.3 trillion. If Apple’s stock price rises at a compound annual growth rate of 9% over the next five years, it will surpass the $5 trillion mark.
You sometimes hear that in football the best offense is a strong defense. I think that can be true in business as well. Apple has an exceptionally strong “defense” with its very loyal customer base and its sticky ecosystem of products and services. This should help prevent the company’s market cap from falling and innovations drive growth.
What innovations are on the horizon from Apple? The most obvious is Apple Intelligence, the company’s first generative AI capability. Some Wall Street analysts believe the upcoming launch of Apple Intelligence will kick off a new iPhone upgrade supercycle.
I think we’ll also see more from Apple in the augmented reality space — and not just with the Apple Vision mixed-reality headsets. Also, 6G wireless networking could be available by 2030, which would enable cool new capabilities like viewing holographic images on your iPhone. The expectation of that alone could push Apple above the $5 trillion market later this decade.
I could be wrong
I’ll be the first to admit that my prediction could be completely wrong. Maybe I’m counting too much on Apple’s innovation to drive growth. However, I suspect that if I’m wrong about Apple being the first $5 trillion stock, it’s because one of the other stocks I mentioned will hit that level first.
I can easily imagine many scenarios where another stock beats Apple to a $5 trillion market cap. Maybe artificial general intelligence (AGI) is achieved, making Nvidia’s GPUs more important than they are today. A major breakthrough in quantum computing could come from Alphabet, Amazon, or Microsoft. Another development could come out of nowhere from a company I haven’t mentioned yet that is a mind-boggling game changer.
But based on where things stand now, I think Apple has the best chance of being the first to reach a $5 trillion market cap. Even if I’m wrong, the stock should be a solid winner for investors over the next decade and beyond.
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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, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet, Amazon, Apple and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Prediction: This Will Be Wall Street’s First $5 Trillion Stock Originally Published By The Motley Fool
