It rose above several oil giants to the top spot in 2011 and hasn’t dropped out of the Top 3 since then. Apple isn’t always the top dog, occasionally passed by fellow tech giants like Nvidia (NASDAQ: NVDA) or Microsoft (NASDAQ: MSFT) for a while, but it never strays far from the top spot. And it’s back on the throne as of this writing with a $3.54 trillion market cap on November 25.
I’m not saying that the iPhone will go out of style and send Apple’s stock tumbling down the rankings over the next decade. However, I could definitely imagine a couple of currently smaller names becoming more valuable than Cupertino’s finest in 10 years or so. Read on to see why I expect Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) to wrest away Apple’s market cap crown over time.
First of all, I have to assume that Apple’s record-setting stock gains will slow down in the coming years. Otherwise, Amazon and Alphabet would have a hard time catching up. They are starting several steps behind the current leader, after all:
Data found on YCharts and Finviz, 11/25/24.
Apple didn’t find its leading market position in a cereal box. Despite faltering sales of iPhones and iPads, the company maintained a solid foundation of hardware sales paired with soaring software and service revenues in recent years. This trio has stayed fairly close since 2020, but Apple always seems to find a way back up.
My mildly bearish thesis is that Apple is running out of truly innovative ideas. I know, you’ve heard it all before — iPads are just larger iPhones without a phone service, the lucrative Apple ecosystem is bad for the customer, high prices don’t always reflect superior products, and so on. Apple bears have been saying this stuff for years, but guess who’s still the most valuable company in the world?
Still, Apple has seen more misses than home runs lately. The Apple Vision Pro virtual reality headset never found a market and is reportedly being discontinued after less than a year. The latest round of product introductions essentially featured slightly faster iPhones, MacBooks, and iPads with more memory. Only time will tell whether the highly touted Apple Intelligence set of artificial intelligence (AI) features will make a difference. Either way, Apple didn’t lead the charge into the generative AI era.
Sorry if I’m boring you to sleep with age-old Apple criticisms. They seem more valid than ever, though. And a lack of exciting innovation is my main point here.
So I wouldn’t be surprised to see Apple’s rocket engines run low on market-beating fuel relatively soon. The company certainly has the budget and engineering talent to prove me wrong — the proof is in the fruit-flavored pudding, though.
Why should Amazon outperform Apple by a wide margin in the next decade? The innovation that’s missing from the current leader is in abundant supply at Amazon.
What started as a simple (but groundbreaking at the time) online bookstore has grown to dominate e-commerce in North America. The Amazon Web Services (AWS) cloud computing platform also broke new ground and remains the clear industry leaders 18 years later. The company has also built a shipping network that outshines FedEx and UPS in many ways, automated its warehouses before AI was cool, and brought Alexa-driven digital assistants into millions of homes. That’s not a complete list, either. It just a few of the most obvious business revolutions this remarkable company has introduced, off the top of my head.
Amazon’s innovation isn’t slowing down, either. The company seeks fresh and unique advantages at every turn. This attitude should keep the stock rising in the long run, probably passing Apple’s market value in a few years.
Here’s another unstoppable innovator. Alphabet is still powered almost exclusively by the Google division, which leads the global market for online search and advertising. That segment also accounts for the Android mobile devices family, which holds a global market share of 70% thanks to a huge network of device-building partners. Oh, and don’t forget YouTube, the world’s most popular digital video platform with more viewing hours than sector giant Netflix.
These operations (and more) are technically part of Alphabet’s Google division. That would be good enough for most tech giants, but Alphabet wants more. If and when online search and ads go out of style forever — and I’m sure they will someday — Alphabet wants to have another business ready to carry the whole company forward.
Early contenders include medical research, a fiber-optic internet service provider, a fleet of self-driving taxis, and of course a plethora of AI-based services. I skipped over the Google Cloud platform in the last paragraph, but that’s another Google-branded business that’s pulling its weight in the AI era.
Technology-driven sea changes have this annoying habit of reshaping the global consumer market every now and then. Before AI and smartphones, there were personal computers and video tapes. The list goes on, probably beyond the Neanderthals. There’s just no way to stop progress in the long run, but real winners will know how to stay relevant in a different market. That’s what Alphabet is aiming for, and another area where Apple seems to fall short.
So when you look at the largest companies in (checks notes) 2034, I expect Alphabet and Amazon to have passed Apple for good. Again, Apple could prove me very wrong and I would love to see the tech giant restarting its faded innovative fires someday. Until then, I’d much rather own Alphabet and Google stock.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, Amazon, Netflix, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, FedEx, Microsoft, Netflix, and Nvidia. The Motley Fool recommends United Parcel Service and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Prediction: 2 Stocks That Will Be Worth More Than Apple 10 Years From Now was originally published by The Motley Fool
