Nvidia Just Hit a $5 Trillion Market Cap -- and I Predict This Company Will Join It Within 3 Years

Dominant AI chip market leader Nvidia (NASDAQ: NVDA) recently became the first company to exceed a $5 trillion market cap, thanks to surging demand for AI infrastructure. But I don't think Nvidia will be the only member of the newly created $5 trillion club for long.

Although it isn't the next-largest company in the market (it's actually the fifth largest), I think Amazon (NASDAQ: AMZN) has a better chance of becoming the next $5 trillion company than many investors believe.

For one thing, Amazon's recent earnings showed strong momentum throughout its business, with 20% year-over-year revenue growth in the market-leading AWS business, 24% growth in advertising revenue, and massive demand for AI services. In fact, Amazon announced a $7 billion increase from its previous full-year capital expenditures forecast and said the $125 billion spending number is likely to get even larger next year. Even the core e-commerce marketplace grew by double digits.

Image source: Amazon.com.

Massive opportunities still ahead

Here's one interesting observation investors should take note of. Amazon is the fourth mega-cap tech stock that announced an increase in capex along with its third quarter earnings report. Meta (NASDAQ: META), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) all did so as well. But Amazon's stock is exhibiting the best reaction to the news, by far. In fact, in the cases of both Meta and Microsoft, the higher spending was generally seen as a negative by shareholders.

One likely explanation is that investors are confident that Amazon is going to get a strong return on its infrastructure investments. I mentioned that AWS revenue grew by 20% year-over-year, faster than investors had expected, and this is by far the more profitable of the company's two main businesses.

Consider the opportunity still ahead for Amazon and its leading cloud services business. According to Grand View Research, the cloud computing market is forecast to reach nearly $2.4 trillion in size globally by 2030 -- that's more than triple 2024's market -- and AI demand is the biggest contributor. In short, if Amazon can simply maintain its leading 30% cloud services market share, the hundreds of billions in capex will be money well spent.

That's not to discount the opportunities on the e-commerce side of Amazon's business. Even after the explosive growth in e-commerce over the past decade, it still accounts for just 16% of U.S. retail sales.

There's also the advertising business, which has been a rapidly growing part of Amazon's business for the past several years and still has lots of potential.

The next $5 trillion company

With a market cap of about $2.6 trillion now, it might sound like a stretch to predict that Amazon will be the next $5 trillion company. After all, Apple (NASDAQ AAPL) is (barely) in the $4 trillion club, Microsoft (NASDAQ: MSFT) is valued at $3.8 trillion, and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) is worth nearly $3.4 trillion.

But I'd also argue that Amazon has excellent momentum throughout its business and trades for a rather reasonable valuation right now. It trades for about 37 times forward earnings, which is significantly lower than it was a year ago, and there's a solid case to be made that there's a lot of margin for Amazon's leaders to still unlock.

Of course, the odds are certainly in favor of one of the other mega-caps I just mentioned when it comes to joining the $5 trillion club in the near future. But don't count Amazon out -- in fact, I'll make the prediction that Amazon will reach a $5 trillion market cap within the next three years.

Matt Frankel has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool 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.