What will be the most valuable company in the world in a year?

Although Microsoft (NASDAQ:MSFT) held the title for a few months, Apple (NASDAQ:AAPL) briefly regained its crown as the world’s largest company by market capitalization this month. But this week, Nvidia (NASDAQ:NVDA) I succeeded for the first time. On Thursday, the Windows maker was again in first place, but since the three companies hold a market capitalization of around $3.2 trillion, in the short term their ranking among the top three could change often.

But what will matter more to investors is the direction stocks take in the medium to long term. So which of them is most likely to hold the title a year from now?

The case of Apple

Apple was significantly behind Microsoft until its Worldwide Developers Conference a few weeks ago. Although it announced several things during the event, the biggest launch by far was Apple Intelligence – essentially, Apple’s vision of artificial intelligence (AI). These features won’t directly generate more revenue for Apple, but it’s worth noting that the features of generative AI will only be available on its latest smartphone models, the iPhone 15 Pro and 15 Pro Max – and of course on subsequent generations.

It is enormous. Current estimates indicate that over 90% of active iPhones are older models. So, if Apple Intelligence proves to be a game-changer, it will drive a stronger upgrade cycle than Apple has seen since the start of the pandemic.

If this new wave of demand arrives, Apple’s sales and profits will skyrocket. This is a compelling argument for the proposition that it will once again become the world’s largest company in a year’s time.

The case of Microsoft

Microsoft has overtaken Apple as the world’s largest company due to its heavy involvement in generative AI. Once Microsoft realized the impact this technology could have, it quickly developed an integration with market leader OpenAI’s ChatGPT for its Microsoft Office products. To access these features, businesses or consumers have to pay additional fees, which has increased Microsoft’s revenue.

In addition to Copilot, Microsoft’s cloud computing wing is on fire. Most companies don’t have the internal capacity to run AI workloads and would rather not spend a fortune developing this infrastructure. Instead, they rent computing power from cloud computing providers like Microsoft Azure, which gives them access to the hardware they need.

The wave of demand this has generated has been huge for Microsoft and will likely continue. However, the effect this is having is already visible to investors, and it is unlikely to improve from now on.

The story continues

The case of Nvidia

Nvidia has been a rocket ship since the start of 2023. The massive demand for AI has led to a parallel increase in demand for the most powerful graphics processing units (GPUs), capable of delivering the high-speed computing power that software needs. This led to increased revenue and profits for Nvidia, the leading manufacturer of cutting-edge products…