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A lot can happen in five years. For example, in 2019, most people had never heard of coronaviruses, mRNA vaccines or social distancing.
Likewise, five years can also change the stock market. As new technologies arrive, the corporate hierarchy will evolve. Existing leaders may stumble and rising stars may take their place.
Who will be the three largest companies in terms of market capitalization in 2029? Here’s my prediction.
Microsoft
By 2029, Microsoft (NASDAQ: MSFT) will regain its position as the largest listed company in the world.
There are many reasons why Microsoft will take a leap of faith Apple. Still, I think The main reason is that software will become more important than hardware over the next five years, which will significantly benefit Microsoft and hurt Apple.
Admittedly, Microsoft is not just a software company anymore. It makes gaming devices, laptops and tablets. However, these products represent a fraction of Microsoft’s revenue. The majority of the company’s revenue comes from cloud computing, application and operating system software and, increasingly, artificial intelligence (AI).
Microsoft’s long-term partnership and investment in ChatGPT maker OpenAI has already paid off as the company has integrated many ChatGPT-powered features into its software products. Furthermore, as AI technology evolves, investors should expect further integration and innovation that will keep Microsoft’s iconic software suite at the top for years to come. come.
In time, this should help Microsoft overtake Apple, whose revenue growth has stalled as iPhone sales have leveled off. Admittedly, Apple has some exciting AI features that have revived its stock price. In the long run, however, Apple must develop new, innovative hardware or its inventory will not be able to keep up with Microsoft’s.
Nvidia
It has been the hottest stock on Wall Street for the past two years are currently the third largest company by market capitalization. Are Nvidia (NASDAQ: NVDA)And I think by 2029 it will be the second largest company.
Promised, I recently became neutral on Nvidia due to its high valuation. Although I still believe the company can reach second place on this list within five years.
That is because Nvidia’s graphics processing unit (GPU) technology is the industry standard. When companies want to develop advanced AI systems, they need Nvidia GPUs — a lot of by them. Companies like it Meta Platforms And Tesla have bought hundreds of thousands of these chips to perfect the metaverse or tear fully self-driving.
That, in turn, has led to a huge increase in Nvidia’s revenues. Annual revenue has almost tripled, from $25 billion to $70 billion in less than two years.
Although I worry about whether Nvidia can continue to meet (and beat) sales estimates as competition from AMD and others rise, I still think the company’s stock can outperform Apple’s.
Amazon
Finally there is Amazon (NASDAQ: AMZN). It is currently the fifth largest US company, with a market capitalization of $1.9 trillion. But by 2029 I think it will jump Alphabet and Apple to reach number 3. This is why.
Like Microsoft, Amazon relies on a diversified set of revenue streams. It operates the world’s largest cloud services platform, Amazon Web Services (AWS), the world’s largest e-commerce network, and one of the best advertising networks. Crucially, the country also has undervalued assets in AI and robotics.
Consider Amazon’s vast warehouse network. The company has more than 750,000 robots working in these facilities and plans to add many more in the coming years. The company has already doubled its robot workforce in the past three years.
This use of robots not only makes Amazon operationally more efficient (leading to more profits for shareholders), but it also puts Amazon in a prime position to grow its robotics business – if It so choose. The company could use the lessons learned from its robotics business to help other organizations, from restaurants to retail stores, as robots become the norm in the workplace.
Finally, Amazon’s AI-powered smart speakers offer an opportunity for growth. More than 500 million have done so sold, but they have never been particularly profitable. However, a recent one internal turmoil should give investors hope that Amazon can solve the puzzle of how to make AI speakers for the home more than just novelties. If the company can pull this off, it could be a huge new revenue stream for Amazon.
To sum upAmazon is performing well with just its existing business streams. However, if the company can capitalize on its potential in robotics and AI, I think Amazon could climb past Alphabet and Apple to take third place by 2029.
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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, 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. Jake Lerch has positions in Alphabet, Amazon, Nvidia and Tesla. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has one disclosure policy.
Opinion: These will be the three largest companies in 2029 was originally published by The Motley Fool