Microsoft caused a stir earlier this month when its market cap surpassed $3 trillion and unseated Apple as the most valuable company in the United States. But while Alphabet is more than $1 trillion behind that pace, investors are looking at Google’s parent company as the next likely candidate above the $2 trillion market cap. Tuesday’s earnings after the market close can provide that final boost. Alphabet closed Monday at a market cap of $1.91 trillion, less than $100 billion of its $2 trillion market capitalization, and trails Microsoft and Apple with market caps of $3.03 trillion and $2.91 trillion, respectively. Apple became the first US company to reach $3 trillion in value in January 2022. Alphabet’s proximity to $2 trillion makes it the most likely contender to reach the milestone, and healthy earnings coupled with positive commentary on AI could serve as near-term catalysts. said technology investor Paul Meeks. “As long as we don’t have a recession, they should do well with digital advertising,” said Meeks, who earlier in his career managed $8 billion in technology funds under Merrill. Lynch Investment Managers. Alphabet is aggressively preparing “for the world of artificial intelligence like everyone else, so I expect that to be a good driver for the company,” Meeks added. Alphabet has been at the forefront of the AI push, using its Bard service to rival Microsoft and its ChatGPT offering. Most recently, Alphabet introduced its large language model, Gemini, in December, which it described as its largest and most capable model yet. Comment on the fourth-quarter earnings conference call about how YouTube’s parent company plans to monetize Gemini could bode well for the stock, Deepwater Asset Management’s Gene Munster said. As Alphabet makes more progress in bringing AI to market for both enterprise and consumer clients and making money from it — what Wall Street calls “monetization” — Wedbush analyst Dan Ives sees AI worth another $30 to $40 per share for the company. Beyond Alphabet Alphabet is close to entering the $2 trillion club, but other prominent big tech companies are making progress, too. Amazon is a candidate in part because of the monetization of its cloud computing business as well as artificial intelligence capabilities that many investors have not yet taken into account when evaluating it, according to Ives. Amazon’s market cap ended Monday at $1.64 trillion. AMZN YTD YTD performance “AI has exceeded their goals, but they are just beginning the next phase of their growth on the enterprise cloud,” he said, expecting AI to add another 25% to 30%. Incremental value for Amazon. Continued growth in Amazon Web Services could also boost the leading e-commerce platform beyond the $2 trillion threshold, Deepwater’s Munster said. The managing partner also sees Meta Platforms as a candidate for a future market cap of $2 trillion. The value of the parent company of Instagram and Facebook has nearly tripled in 2023 and is already up 13% since the start of 2024, surpassing the $1 trillion mark earlier this month. Next year, Monster expects Meta to harness new AI capabilities to improve user engagement and deliver new forms of content. META Stock YTD Mountain Meta Platforms In 2024 Investors will also see Nvidia’s beloved AI chip. The maker of high-end graphics processing units reached the $1 trillion market cap for the first time only in 2023, when it rose nearly 240%. By Monday’s close, Nvidia was already valued at $1.51 trillion, having risen another 26% this month alone. AI’s potential to add to its earnings will continue to push Nvidia higher, Wedbush’s Ives said. “Although there is a lot of concern about the evaluation, [profit] “The numbers keep going up so much, we don’t see any real competition until 2025 or 2026,” Ives said, adding that it’s within the realm of possibility that CEO Jensen Huang’s Nvidia could be worth $3 trillion in the next few years.
This household name could be next to the highest market cap of $2 trillion
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