Prediction: 2 US stocks that will be worth more than Nvidia 5 years from now

These US stocks have a shot at surpassing Nvidia over the next few years.

A man and a woman sit in front of a laptop looking fascinated and captivated.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Nvidia has been on an impressive tear lately, but many investors are concerned about the longevity of Nvidia's current position. It's known to be a cyclical company, so a demand reduction in its GPUs (graphics processing units) is coming, although no one knows when.

With Nvidia trading on much of its future prospects, there isn't much room for error. However, there are two companies that aren't as high-flying as Nvidia and could be worth more than it five years from now.

The two companies? Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN), which are the fourth- and fifth-largest companies in the world, respectively.


When discussing which company is larger, I'm talking about market capitalization. Market cap is how much a company is worth and can be calculated by multiplying the shares outstanding by the stock price. Nvidia currently holds around a $3 trillion market cap, while Alphabet and Amazon are valued at around $2.3 trillion and $2.1 trillion, respectively. So, if Nvidia stays stagnant, these two would have to grow by 31% (Alphabet) and 45% (Amazon) to catch Nvidia.

Over a five-year span, those aren't unrealistic outperformance rates, so the odds of either company surpassing Nvidia aren't that low.

Alphabet has a strong case of being worth more than Nvidia solely on a valuation basis. I could talk about how Google Gemini is a fantastic generative AI model that is starting to pick up momentum after stumbling out of the gate or how Google Cloud is vital in artificial intelligence (AI) infrastructure. But the argument is far simpler than that.

Currently, Alphabet trades at 24.5 times forward earnings. While this is still more expensive than the broader market's 22.3 times forward earnings (measured by the S&P 500 index), it's still far cheaper than the three larger companies in front of it.

GOOGL PE Ratio (Forward) Chart

GOOGL PE Ratio (Forward) data by YCharts

With Microsoft and Apple trading at 34 and 33 times forward earnings, respectively, they garner a much higher premium than Alphabet.

While some may argue that this premium is warranted due to recent execution, I'd argue that Alphabet is just as deserving over the long term. If you gave Alphabet a 33 times forward earnings multiple, the company would be valued at $3.08 trillion -- essentially the same size as Nvidia.

Alphabet doesn't get nearly the respect that some other companies do in today's market. As a result, I think it has a strong case to be worth more than Nvidia in the future, as it isn't trading with lofty expectations built into the stock.


Amazon's case isn't as straightforward as Alphabet's. The stock trades at 44 times forward earnings, nearly identical to Nvidia's 45 times forward earnings valuation.

However, I believe Amazon's high valuation is a byproduct of its focus on efficiency. CEO Andy Jassy has been pushing for better operating efficiency since he was promoted to CEO. So far, Amazon excelled in this pursuit.

Segment Revenue YOY Revenue Growth Operating Income YOY Operating Income Growth
North American $86.3 billion 12% $5 billion 455%
International $31.9 billion 10% $903 million N/A
AWS $25 billion 17% $9.4 billion 84%

Data source: Amazon. YOY = Year over year. Note: International was unprofitable last year.

With the impressive improvements in all divisions in a year, his plan is clearly working. However, Jassy isn't done yet. Although these profit levels are the highest they've been since the peak of COVID, Jassy believes there are more gains to be had.

This combination of revenue growth (Amazon grew its revenue by 13% in the first quarter) with margin improvement causes earnings to rise rapidly, making the stock appear cheaper if the stock price doesn't rise by the exact same amount.

Amazon is a solid business with serious staying power. Because of its track record of execution and solid growth, I think it will be worth more than Nvidia in five years. Nvidia's business comes in waves, and although that's great for peaks, it can hurt it when times aren't so good.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet and Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

asx share price boosted by us investment represented by hand waving US flag across winning athlete
International Stock News

Is it too late for ASX investors to start buying US shares?

Should ASX investors start taking the gains from US shares like Nvidia off the table?

Read more »

A US flag behind a graph, indicating investment in US shares
International Stock News

Which US shares are ASX investors buying in 2024?

The ASX's most popular US shares contain some familiar names...

Read more »

Digital rocket on a laptop.
International Stock News

Is Nvidia stock going to $150 in the wake of its high-profile 10-for-1 stock split?

Wall Street analysts are reviewing their models in the wake of Nvidia's stock split.

Read more »

A woman walks along the street holding an oversized box wrapped as a gift.
International Stock News

Better megacap stock: Nvidia vs. Microsoft

Megacap stocks have ruled the year so far. Is Nvidia or Microsoft better positioned for the second half of the…

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
International Stock News

Is Nvidia stock a buy now?

Nvidia investors are looking ahead. But there is risk in counting on things that haven't happened yet.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
International Stock News

45% of Warren Buffett's $398 billion portfolio is invested in 3 artificial intelligence (AI) stocks

You won't find Warren Buffett chasing the latest stock market trend, but many of the stocks held in Berkshire Hathaway's…

Read more »

A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.
International Stock News

Where will Tesla stock be in 5 years?

Is the innovative electric vehicle maker bouncing back -- or fading into obscurity?

Read more »

A couple are happy sitting on their yacht.
International Stock News

Could Nvidia stock help you become a millionaire?

The company has hooked developers with its AI ecosystem and has the cash to maintain its market lead.

Read more »