Prediction: 2 stocks that will be worth more than Apple in 10 years

In the world of finance, 10 years is a blink of an eye. Do you want proof? Take a close look at the table below:

In August 2014, IBMits market cap was about 18 times that Nvidiahis (NVDA 4.55%). But oh, how things have turned. Today, Nvidia boasts a market capitalization of about $3 trillion — approximate 17 times bigger than IBM.

So, looking ahead to the next one 10 years, what are the companies that could exceed Appleits enormous market capitalization? Here are two that might make it.

Image source: Getty Images.

Microsoft

If a company is going to overtake Apple in the next decade, it will need a gigantic market cap. Even assuming that Apple’s market capitalization is constant, that would mean a company would need to reach a market capitalization of $3.4 trillion to catch Apple.

It’s a very tall order and I am only so many companies that he could do it. Microsoft (MSFT 0.30%) is one of them.

For starters, Microsoft already has a market cap of $3.1 trillion as of this writing. That as recently as June, Microsoft have a larger market cap than Apple. Additionally, Microsoft has several competitive advantages that should, over time, help the company’s market cap overtake Apple.

First, Microsoft has a more diversified business. The company has its hand in cloud computing, gaming, advertising, hardware, software, social media and artificial intelligence (AI). In short, Microsoft has many paths to success. Apple, on the other hand, it has traditionally benefited from its excellent hardware innovation. And while Apple’s services and artificial intelligence could boost the company’s revenue, declining iPhone sales could pose a real challenge for Apple over the next decade.

In my book, that’s a plus for Microsoft.

Nvidia

I have reservations about Nvidia right now. Its skyrocketing valuation makes it vulnerable to a nasty correction if the company’s sales show any signs of slowing down. That being said, this article is about what could happen in the next 10 years. And in this case, I think so Nvidia is well positioned to overtake Apple.

That’s because Nvidia’s core business — making the graphics processing units (GPUs) that will power next-generation AI systems for the next decade — is on a long-term growth trajectory that Apple simply can’t fit.

Sales of Apple’s signature product — the iPhone — rose every year between 2007 and 2015, but have remained flat since then.

Image source: Statista.

Nvidia, on the other hand, is still growing. Over the past two years, the company has tripled its revenue as GPUs have sold like hotcakes. That growth it is not probably to slow in the next few years. Most analysts expect Nvidia’s sales to double again to around $160 billion by 2026.

Sure, there will likely be some bumps in the road as competitors take market share from Nvidia in the hot AI chip market. But even if Nvidia’s sales growth slows, it could easily close the $500 billion market cap gap between it and Apple over the next decade.