2026 Forecast: Two AI Stocks Could Surpass Nvidia and Palantir’s Value
Recent projections suggest that by the end of 2026, Alphabet and Microsoft could potentially eclipse the collective market value of Nvidia and Palantir Technologies. As of December 4, Nvidia holds a market capitalization of $4.4 trillion, while Palantir is valued at $424 billion, bringing their total to approximately $4.8 trillion.
Market Potential for Alphabet and Microsoft
Alphabet’s current market cap stands at $3.8 trillion. To reach a market value of $4.9 trillion, Alphabet’s stock needs to experience a growth of 29%. Microsoft, valued at $3.6 trillion, would need a 36% increase to achieve the same milestone.
Alphabet: Driving Growth Through AI
- Alphabet is the world’s leading adtech firm, leveraging platforms like Google Search and YouTube.
- The company is enhancing consumer engagement using artificial intelligence.
- Alphabet’s Gemini AI assistant has over 650 million monthly active users, making it the second-most popular AI assistant.
In the third quarter, Alphabet’s advertising revenue rose by 13%, marking its second consecutive quarter of acceleration. The company has also seen significant growth in its Google Cloud services, which occupies the third position among public clouds in terms of infrastructure and platform services spending.
Furthermore, AI-driven developments have led to a substantial increase in revenue from generative AI products, which surged by over 200% in the latest quarter. Analysts expect Google Cloud’s revenue growth to reach 44% by 2026.
Microsoft: AI Integration in Software
- Microsoft is recognized as the largest enterprise software provider globally.
- The company’s generative AI capabilities are integrated into its software suite, including Microsoft 365.
- Azure, Microsoft’s cloud platform, is the second-largest public cloud service.
The monthly active users for Microsoft’s entire suite of AI applications rose to 150 million in the last quarter. Azure’s growth is augmented by plans to significantly expand its data center capacity over the next two years. This growth trajectory positions Microsoft to potentially surpass the industry’s growth rate, projected to expand at 20% annually through 2030.
In the most recent quarter, Microsoft reported a 21% increase in adjusted earnings per share. If this trend continues and the company’s valuation metric expands, Microsoft could join the ranks of companies worth $4.9 trillion as well. Some analysts predict a stock target price exceeding $660 per share, which would align with this forecast.
Final Insights
While both companies show promising forecasts, Alphabet currently appears to have a better shot at reaching the $4.9 trillion market value sooner than Microsoft. Investors may consider prioritizing Alphabet in their portfolios as these shifts in the AI landscape continue to unfold.
