Apple (NASDAQ: AAPL) is currently the most valued company in the world with a market capitalization of $ 2.82 trillion. This is not surprising as the tech titan is a dominant player in the smartphone market and offers ancillary products and services to drive growth.
The tech giant generated a whopping $ 365.8 billion in revenue in fiscal 2021, a 33% increase from the previous year. The fact that Apple is growing at a breakneck pace despite being a mega-capitalization company is impressive, but it’s not surprising as its products and services are in high demand. More importantly, Apple is not resting on its laurels and is looking to push the boundaries by seizing emerging technology trends and entering new markets.
As such, Apple is pulling several strings to ensure it remains the world’s most valuable company for a long time. However, the likes of Nvidia (NASDAQ: NVDA), ASML Holding (NASDAQ: ASML), and Amazon (NASDAQ: AMZN) could become more valuable than Apple by 2035, thanks to the fast growing markets in which they operate. Let’s see why this can be the case.
Nvidia has a market capitalization of $ 707 billion. It should be noted that the graphics card specialist’s market capitalization has grown at a much faster rate than Apple’s over the past decade.
Nvidia stocks have stepped on the gas since 2016. They have gone supersonic over the past two years as it has become clear that its graphics cards play an important role in powering multiple applications ranging from gaming consoles to personal computers, data centers and autonomous vehicles. . The massive demand for graphics cards from Nvidia is evident in the company’s recent results.
The company generated $ 19.3 billion in revenue in the first nine months of fiscal 2022, a 65% jump from the previous year period. Its adjusted earnings rose 81% in the first nine months of the year to $ 3.12 per share. This tremendous growth has been driven by two key enablers: games and data centers.
Nvidia absolutely dominates these two markets. The company has an 83% share of discrete graphics cards that power gaming PCs, while its share of the booming data center accelerator market was 80.6% a year ago. The good part is that these two markets are expected to add billions of dollars in revenue going forward. The GPU (graphics processing units) market, for example, is expected to register an annual growth rate of 33% through 2028 and reach $ 246 billion in value, according to a third-party estimate.
The use of GPUs as data center accelerators is growing by 42% per year, a rate that is expected to continue through 2027. Add in nascent catalysts such as omniverse and autonomous cars, and it’s easy to see why the revenues Nvidia’s are expected to grow at an annual rate of nearly 40% over the next five years. This is far more than Apple’s forecast earnings growth rate of 15% over the same period, further indicating why Nvidia could be a strong candidate to overtake Apple’s market cap over the next 15 years. .
2. Holding ASML
Apple was unable to manufacture enough iPhones and iPads in the last quarter due to supply chain constraints resulting from the global chip shortage, and it cost the tech giant $ 6 billion. dollars of income. ASML is a company that could help get more chips into the hands of Apple and others who are suffering from chip shortages due to the semiconductor shortage.
This is probably one of the reasons why ASML stock was among the best performing in 2021 and topped Apple’s gains by a significant margin this year.
It will not be surprising to see this trend continue as demand for ASML machines that help foundries manufacture chips has exploded. Net bookings for ASML’s machines increased to 6.2 billion euros in the third quarter of 2021, more than double the net bookings of 2.87 billion euros during the period. last year.
The Dutch giant announced a 32% increase in turnover during the quarter to 5.24 billion euros. The fact that ASML’s bookings have grown at a faster rate than actual revenue indicates that it can maintain its impressive revenue growth by fulfilling more orders and turning the backlog into actual sales. The company is on track to end 2021 with 35% revenue growth, and Wall Street estimates suggest it can continue to grow at such an impressive rate for a long time to come.
Venture capital firm Air Street Capital estimates ASML could reach $ 500 billion in market capitalization next year, which would be a huge jump from its current market capitalization of $ 311 billion. In addition, ASML’s profits are expected to grow nearly 30% per year over the next five years, double the projected growth of Apple.
ASML appears to be in a strong position to hold Wall Street’s forecast, as the semiconductor market is expected to generate $ 1 trillion in revenue by 2030, a huge jump from 2018 levels of $ 466 billion. . Foundries would have to spend more money on equipment to meet the huge demand, which could overwhelm ASML in the long run, as it is the biggest player in the photolithography machine market.
Amazon is yet another stock that has easily overtaken Apple’s earnings over the past decade.
Amazon’s focus on diversifying from a vanilla e-commerce company into a leading provider of cloud computing, video streaming, music streaming services and dominating the markets in which it operates has helped the company to grow at a lightning pace and reach a market cap of $ 1.7 trillion. This tech stock is expected to continue its tremendous growth in the years to come, with profits expected to grow at a compound annual growth rate of 36%.
Again, this is much higher than Apple’s projected growth rate. This is because Amazon is on track to take advantage of several fast growing end markets. For example, the company’s Amazon Web Services (AWS) cloud computing division has a 32% share of the $ 150 billion cloud infrastructure market. Third-party estimates put the global cloud computing market size at $ 927 billion by 2027, which is expected to ensure a high growth rate in the AWS segment.
Amazon’s AWS revenue jumped 39% year-over-year in the third quarter to $ 16 billion, outpacing growth in e-commerce segments. Meanwhile, Amazon owns 40% of the US e-commerce market which is expected to reach $ 8 trillion in revenue by 2030. All of this indicates that the company’s revenue could increase dramatically in the near future. years ahead compared to its last 12-month revenue of $ 458 billion.
As such, Amazon stock could continue to be a better growth choice than Apple over the next decade and beyond. It could potentially eclipse the iPhone maker’s market cap in the long run, given its much faster growth rate.
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