5 stocks that could propel artificial intelligence (AI) into the $2 trillion club

By | March 4, 2024

The artificial intelligence (AI) rush is seemingly aimed at the big tech companies with the deep pockets to outdo everyone… except each other. So the race is on among them to establish themselves in this exciting new industry.

The ‘Magnificent Seven’ continues to destroy the broader stock market, in most cases each exceeding a trillion-dollar valuation.

While there may be some pullbacks along the way, five of these big tech stocks have the individual growth potential to grow above a $2 trillion valuation in the coming months and years:

1.Tesla

Leader in electric vehicles (EV). Tesla (NASDAQ: TSLA) has built a more than $640 billion business in EV leadership. But CEO Elon Musk’s ambitious artificial intelligence goals for full self-driving technology (FSD) and humanoid robotics could drive Tesla stock to new heights in the coming years. FSD technology would enable a robotaxi company. Furthermore, humanoid robots could potentially replace many millions of human workers.

When you combine that long-term potential with a rock-solid EV business that still has years of growth left (EVs make up only about 1% of active passenger vehicles in America), it’s easy to imagine a company many times larger than its current company. stands. That makes Tesla a prime candidate to eventually grow to $2 trillion.

2. Metaplatforms

Social media giant Metaplatforms (NASDAQ: META) has grown to $1.2 trillion thanks to an advertising business that continues to grow very healthily. CEO Mark Zuckerberg’s commitment to augmented reality, Meta’s Reality Labs unit, could be the icing on the sundae in the long run. Meta has already unleashed AI for advertisers on Meta, but Reality Labs is working to establish dominance with its Quest headsets, fighting for a post-smartphone future.

As it stands now, Meta will grow revenues by an average of 20% annually over the next three to five years. However, a financial return on Reality Labs, which is currently losing billions of dollars annually, could completely change Meta’s long-term trajectory.

3. Nvidia

AI chip leader Nvidia (NASDAQ: NVDA) has already flirted with a $2 trillion market cap, so the company’s climb past the milestone feels inevitable. Nvidia’s combination of hardware quality and software has created a turnkey product that customers can quickly deploy for advanced performance. Some analysts estimate Nvidia’s market share in AI chips to be as high as 90%.

It’s unclear whether Nvidia will maintain this momentum, although its recent growth performance has been astonishing. But even if the competition eventually starts to take a bite of Nvidia’s pie, the long-term AI opportunity seems high enough that Nvidia’s footprint will certainly make it a solid bet to reach a valuation north of of $2 trillion.

4. Amazon

As the world’s leading cloud platform and de facto e-commerce leader in America, Amazon (NASDAQ: AMZN) is already close to a $2 trillion valuation. But again, it’s not about touching the ceiling, it’s about break through it. Amazon has the long-term catalysts to achieve that. Amazon is weaving AI technology into its cloud business, Amazon Web Services, to give customers an ecosystem to build on.

Amazon is poised to continue years of solid earnings growth. Analysts expect earnings growth of an average of 28% per year over the next three to five years. That happens when you lead billion-dollar opportunities like cloud computing and e-commerce. Investors can buy and hold and enjoy the long-term ride.

5. Alphabet

Another company approaching the $2 trillion mark: internet giant Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG)Still have some things to figure out. The company competes with OpenAI’s ChatGPT on generative AI with its version, Gemini. However, the model has recently been criticized for the way it interpreted specific cues. That should be corrected over time and does not change the fact that Google and Alphabet’s YouTube dominate global search results and are the most visited websites in the world by a wide margin.

Like Meta, Alphabet can leverage AI across its consumer-facing products and use it to optimize advertising for brands and customers. Analysts expect Alphabet’s profits to grow an average of 16% per year over the next three to five years, making a $2 trillion market cap seem like a matter of time.

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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, a director at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Alphabet, Amazon, Meta Platforms, Nvidia, and Tesla. The Motley Fool has a disclosure policy.

5 stocks that could propel artificial intelligence (AI) into the $2 trillion club originally published by The Motley Fool

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