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2 Growth Stocks That Will Be Worth More Than Microsoft in 5 Years


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2 Growth Stocks That Will Be Worth More Than
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in 5 Years

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(NASDAQ: MSFT) is a king of reliability, known for its consistent financial and stock growth. Over the last five years, the company’s share price has risen 200%, while free cash flow has climbed 92%.

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’s steady growth has secured it a market cap above $3 trillion, allowing it to remain in the world’s top three most valuable companies. In fact, from about February to June of this year,
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temporarily surpassed Apple and Nvidia (NASDAQ: NVDA) in market cap, taking the top spot.

Market fluctuations have seen the world’s top five most valuable companies reshuffle multiple times in 2024. Even throughout August, Nvidia and

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have been duking it out for second place on an almost weekly basis. Meanwhile,
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(NASDAQ: AMZN) appears to be on a bull run that could surpass the Windows company in the coming years.

Nvidia and

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have been on exciting growth paths thanks to skyrocketing earnings. These companies dominate their respective industries and are profiting from consistent investment in the lucrative artificial intelligence (AI) market.

While

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is known for consistency, Nvidia and
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are expanding at a rate that could allow them to overtake the company. So, here are two growth stocks I predict will be worth more than
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in five years.

1. Nvidia: A meteoric rise that is unlikely to slow any time soon

Nvidia’s business has delivered record growth since the start of 2023, with its stock up 779%. Its meteoric rise has seen it steadily climb through the ranks of the world’s most valuable companies, as seen in the chart below.

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AAPL Market Cap Chart

As of this writing, Nvidia’s market cap is above

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’s. Their positions switched multiple times this month, suggesting could swap again by the time you read this. However, Nvidia is included in this list as I’d argue that it will have surpassed
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for good and gained a solid lead within the next five years.

Nvidia massively outperformed

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in 2024, with its stock up 159% compared to
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’s 10% rise. Meanwhile, Nvidia’s quarterly revenue is up 18% year to date, with
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’s up 4%. At this rate, Nvidia could even secure its spot ahead of
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much sooner than five years.

Nvidia’s stellar gains are primarily thanks to its dominance in AI. The company is responsible for between 70% and 95% of all

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, the chips necessary for training AI models. Competitors like Advanced Micro Devices and Intel are working to catch up, launching rival GPUs this year. However, Nvidia’s head start and $39 billion in
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(compared to AMD’s $1 billion and Intel’s negative $13 billion) suggests it won’t have too much trouble maintaining its lead.

Story continues

In AI,

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has a prominent role in cloud computing. However, fellow cloud giants
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and Alphabet are much closer competitors than Nvidia’s rivals in the GPU market.

Nvidia will report its second quarter of fiscal 2025 earnings on Aug. 28. After over a year of beating quarterly earnings, the company will likely continue recent trends and deliver another quarter of impressive growth. Its stock could soar, furthering its lead on

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.

2.

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: Soaring earnings and the cash to surpass its rivals

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and
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are in steep competition in the cloud industry. As of Q2 2024,
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Web Services (AWS) cloud market share stood at 31%, while
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Azure’s was at 25%. However,
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ramped up its cloud investment over the last year, which could allow it to hold onto its lead in the industry and eventually push its market cap above
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’s.

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MSFT Chart

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consistently outperformed
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over the last year. Solid growth in retail and AWS has seen
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’s profits soar, allowing it to sink billions into its AI efforts.

In March, Bloomberg reported that

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plans to spend nearly $150 billion on data centers over the next 15 years to expand AWS’ reach. The company anticipates an ********** of demand for AI applications and other digital services, requiring a more extensive cloud network. The news aligns with multiple reports in recent months that announced
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’s data center investment in U.S. locations including Ohio, Indiana, and Virginia, as well as international spots such as Singapore, Spain, Saudi Arabia, India, and Taiwan.

The expansion will increase

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’s cloud and AI capabilities. Meanwhile, a vast network will allow it to boost other areas of its business with the generative technology, such as e-commerce, grocery, digital advertising, and more.

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’s market cap currently sits at $1.8 trillion. However, its earnings and stock are expanding at a rate that will likely see it overtake
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in the coming years.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 

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for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $792,725!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

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*Stock Advisor returns as of August 22, 2024

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

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subsidiary, is a member of The Motley Fool’s board of directors.
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has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet,
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, Apple,
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, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2026 $395 calls on
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, short August 2024 $35 calls on Intel, and short January 2026 $405 calls on
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. The Motley Fool has a
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.

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was originally published by The Motley Fool



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#Growth #Stocks #Worth #

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#Years

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