Although Microsoft (NASDAQ:MSFT) held the title for a few months, Apple (NASDAQ:AAPL) briefly regained its crown as the world’s largest company by market capitalization this month. But this week, Nvidia (NASDAQ:NVDA) I succeeded for the first time. On Thursday, the Windows maker was again in first place, but since the three companies hold a market capitalization of around $3.2 trillion, in the short term their ranking among the top three could change often.
But what will matter more to investors is the direction stocks take in the medium to long term. So which of them is most likely to hold the title a year from now?
The case of Apple
Apple was significantly behind Microsoft until its Worldwide Developers Conference a few weeks ago. Although it announced several things during the event, the biggest launch by far was Apple Intelligence – essentially, Apple’s vision of artificial intelligence (AI). These features won’t directly generate more revenue for Apple, but it’s worth noting that the generative AI features will only be available on its latest smartphone models, the iPhone 15 Pro and 15 Pro Max – and of course, on generations who are. follow.
It is enormous. Current estimates indicate that over 90% of active iPhones are older models. So, if Apple Intelligence proves to be a game-changer, it will drive a stronger upgrade cycle than Apple has seen since the start of the pandemic.
If this new wave of demand arrives, Apple’s sales and profits will skyrocket. This is a compelling argument for the proposition that it will once again become the largest company in the world in a year’s time.
The case of Microsoft
Microsoft has overtaken Apple as the world’s largest company due to its heavy involvement in generative AI. Once Microsoft realized the impact this technology could have, it quickly developed an integration with market leader OpenAI’s ChatGPT for its Microsoft Office products. To access these features, businesses or consumers have to pay additional fees, which has increased Microsoft’s revenue.
In addition to Copilot, Microsoft’s cloud computing wing is on fire. Most companies don’t have the internal capacity to run AI workloads and would rather not spend a fortune developing this infrastructure. Instead, they rent computing power from cloud computing providers like Microsoft Azure, which gives them access to the hardware they need.
The wave of demand this has generated has been huge for Microsoft and will likely continue. However, the effect this is having is already visible to investors, and it is unlikely to improve from now on.
The case of Nvidia
Nvidia has been a rocket ship since the start of 2023. The massive demand for AI has led to a parallel increase in demand for the most powerful graphics processing units (GPUs), capable of delivering the high-speed computing power that software needs. This caused a surge in revenue and profits for Nvidia, the main maker of these cutting-edge chips, taking it from a company worth less than $500 million to one of the largest in the world in a year and a half .
However, concerns remain about Nvidia’s ability to maintain its valuation. Chip manufacturing is a cyclical business and some investors are concerned that demand for these GPUs will decline and the stock will fall.
This is, in my opinion, a mistaken idea. Nvidia still sees demand for its GPUs increasing. Additionally, the company recently launched the H200 GPU, which replaces the incredibly popular H100 with higher efficiency and performance. Additionally, the lifespan of a data center GPU is estimated to be between three and five years. As such, investors should expect a refresh cycle to start relatively soon, driving continued demand for Nvidia’s GPUs.
This argument may be a little flimsier than the other two, but there’s still good reason to expect that within a year Nvidia will be the biggest company in the world.
The verdict
The answer to which of these three will be most important depends on how “must-have” consumers view Apple Intelligence features. My guess is that Apple will be in first place in a year, unless Apple Intelligence is an absolute failure. Its revenue streams have remained stable despite falling demand for its iPhones. This new catalyst could boost their sales and the stock to new levels.
If not Apple, I’d say Microsoft is more likely a leader than Nvidia. However, Nvidia is the biggest wild card here, as it could see the already incredible demand for its GPUs increase, which could spark a further rise in the stock.
Microsoft would be the more conservative choice, but it would still be a good choice if the AI buzz fades.
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Keithen Drury has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends 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.
Apple, Microsoft or Nvidia: which will be the most valuable company in the world in a year? was originally published by The Motley Fool