<div id="readability-page-1">Apple had a market value of $3.7 trillion as of Dec. 31, making it the most valuable U.S. company, a title it has held for the better part of the last decade. But Apple has yet to demonstrate its ability to monetize artificial intelligence, at least not to the same degree as other big tech companies. Not surprisingly, Wall Street expects Apple stock to trade sideways during the next year. In fact, the median 12-month target of $250 per share implies downside from its current share price of $251. It also gives Amazon (AMZN 1.80%) and Nvidia (NVDA 4.45%) a shot at surpassing Apple's current valuation. <ul> <li>Amazon is currently worth $2.3 trillion. The stock price would need to reach $362 per share (about 65% upside as of Dec. 31) for its market value to reach $3.8 trillion.</li> <li>Nvidia is currently worth $3.3 trillion. The stock price would need to reach $156 per share (about 16% upside as of Dec. 31) for its market value to reach $3.8 trillion.</li> </ul> Admittedly, the first prediction is much more aggressive than the second, and the one least likely to be correct. But I think both outcomes are plausible this year. Here's why. <h2>1. Amazon</h2> Amazon reported impressive financial results in the third quarter. Revenue increased 11% to $159 billion on especially strong sales growth in the advertising and cloud computing segments. Operating margin expanded more than 3 percentage points as the company made fulfillment more efficient, and GAAP earnings rose 52% to $1.43 per diluted share. Looking ahead, the investment thesis is threefold: Amazon runs the largest e-commerce marketplace in North America and Western Europe, it is the third-largest ad tech company worldwide, and Amazon Web Services is the largest public cloud. That last point is especially important because it means Amazon is ideally positioned to benefit as demand for artificial intelligence (AI) draws more businesses to the cloud. Wall Street estimates that Amazon's earnings will increase 26% in the next 12 months. That consensus makes the current valuation of 47 times earnings look reasonable. Those figures give a price/earnings-to-growth (PEG) ratio of 1.9, which is a material discount to Apple's PEG ratio of 3.6. If Amazon tops earnings estimates by even a small margin, its valuation multiple may expand to the point where its market value reaches $3.8 trillion. Admittedly, the probability is slim that Amazon shares will advance 65% this year. Even so, patient investors should still consider purchasing a small position today. Indeed, only four companies in the S&amp;P 500 index have a higher percentage of buy ratings than Amazon, according to FactSet Research. <h2>2. Nvidia</h2> Semiconductor company Nvidia reported solid financial results in the third quarter of fiscal 2025, which ended in October 2024. Revenue increased 94% to $35 billion on particularly strong sales growth in the data center segment, driven by demand for AI hardware and software. Meanwhile, non-GAAP net income increased 103% to $0.81 per diluted share. Looking ahead, the bull case is straightforward: Nvidia graphics processing units (GPU) are the gold standard in accelerating computationally demanding data center workloads like artificial intelligence. Indeed, Forrester Research analysts recently wrote, &#34;Nvidia sets the pace for AI infrastructure. Without Nvidia's GPU, modern AI wouldn't be possible.&#34; The company has an important catalyst on the horizon in the launch of its Blackwell GPU, which can complete AI training tasks up to four times faster and AI inference tasks up to 30 times faster than the previous Hopper architecture. Blackwell production ramped in the current quarter, so Nvidia should see substantial revenue from its next-generation chip in the coming year. Wall Street estimates that Nvidia's earnings will increase 50% in the next 12 months. That consensus estimate makes the current valuation of 51 times earnings look downright cheap. Nvidia stock could easily return 16% if the company reports earnings that align with expectations in the coming quarters, and shares could advance even more if it exceeds estimates. Regardless, patient investors should feel comfortable buying a few shares today. In the previous section, I wrote that only four companies in the S&amp;P 500 have a higher percentage of buy ratings than Amazon. Nvidia is in a similar position. Only six companies in the S&amp;P 500 have a higher percentage of buy ratings than Nvidia, according to FactSet Research. </div>

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Apple, valued at $3.7 trillion, may face challenges in maintaining its market position as Wall Street predicts its stock will trade sideways. In contrast, Amazon and Nvidia are positioned to potentially surpass Apple’s valuation by the end of 2025, with Amazon needing a 65% increase to reach $3.8 trillion and Nvidia requiring a 16% increase. Both companies reported strong financial results and are well-positioned to benefit from the growing demand for AI, making them attractive investment options despite the risks involved.

- As of December 31, Apple holds a market value of $3.7 trillion, but struggles to monetize artificial intelligence, leading Wall Street to predict stagnant stock performance.  
- Amazon and Nvidia are positioned to potentially surpass Apple's valuation, with Amazon's stock needing a 65% increase and Nvidia's a 16% increase to reach $3.8 trillion.  
- Both companies reported strong financial results and have favorable growth prospects, making them attractive options for patient investors despite the challenges in achieving their respective stock price targets.

Motley Fool

NVIDIA

Prediction: 2 AI Stocks Will Be Worth More Than Apple Stock by the Year's End in 2025