2 Artificial Intelligence (AI) Stocks to Buy Before They Soar to $5 Trillion, According to a Wall Street Expert

Key Points

• Hedge fund billionaire Philippe Laffont expects Microsoft and Nvidia to achieve market values approaching $6 trillion by 2030.

• Microsoft is using its strength in enterprise software and cloud computing to profit from demand for artificial intelligence.

• Nvidia is well positioned to maintain its leadership in artificial intelligence accelerators due to its robust software ecosystem.

• 10 stocks we like better than Microsoft ›

Billionaire Philippe Laffont runs Coatue Management, a successful hedge fund that nearly tripled the returns in the S&P 500 over the last three years. Coatue curates the Fantastic 40 Growth & Innovation Index, which distills the 150 largest technology companies into a list of 40 stocks best positioned to lead the market in the years ahead.

Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA) currently top that list. Coatue expects them to be the largest companies in the world by 2030, with market values approaching $6 trillion, as detailed below:

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• Coatue estimates Microsoft will be worth $5.7 trillion in 2030. That implies 54% upside from its current market value of $3.7 trillion.
• Coatue estimates Nvidia will be worth $5.6 trillion in 2030. That implies 30% upside from its current market value of $4.3 trillion.

Importantly, Laffont has put his money where his mouth is. Microsoft and Nvidia are two of the largest positions in his $36 billion portfolio, accounting for over 10% of his invested assets. Here's what investors should know about these artificial intelligence stocks.

Image source: Getty Images.

1. Microsoft

Microsoft is the largest enterprise software company and the second-largest public cloud provider, and it's using its strength in those markets to profit from artificial intelligence (AI). Its family of Copilot applications, which automate work across software such as Microsoft 365 and Dynamics 365, surpassed 100 million monthly active users in the most recent quarter.

CEO Satya Nadella says customers are adopting Microsoft 365 Copilot faster than any other product in the business productivity suite. And traction with Copilot is driving the adoption of Copilot Studio, which lets users build AI agents using company-specific data by simply describing the desired functionality in natural language.

In cloud computing, Microsoft recently introduced Azure AI Foundry, a suite of pretrained models and tools that let customers develop, customize, and manage AI applications. "All up, 80% of Fortune 500 companies already use Foundry," according to Satya Nadella. "We continue to lead the AI infrastructure wave and took share every quarter this year."

Microsoft reported encouraging fourth-quarter financial results in fiscal 2025, which ended in June. Revenue increased 18% to $76 billion, driven by particularly strong growth in cloud services, where revenue accelerated for the second straight quarter. Commercial bookings growth also accelerated to 37%, hinting at strong future sales growth. And GAAP (generally accepted accounting principles) earnings rose 24% to $3.65 per diluted share.

Wall Street expects Microsoft's earnings to increase at 12% annually during the next three years. That makes the current valuation of 37 times earnings look expensive, but analysts may be underestimating it. Enterprise software and cloud services spending through 2030 are likely to grow at 12% annually and 20% annually, respectively, according to Grand View Research.

That gives Microsoft a good shot at annual earnings growth in the mid-teens, which makes the stock look a little more attractive and could carry the company to a $5 trillion market value by 2030. Nevertheless, it makes sense to start with a very small position due to the elevated valuation. You can always buy more shares if the stock pulls back.

2. Nvidia

Nvidia dominates the market for data center graphics processing units (GPUs), chips that function as accelerators for demanding workloads such as AI training and inference. The company currently holds more than 80% market share in AI accelerators, and Morgan Stanley analysts think Nvidia will maintain that same level of dominance for years to come, despite intense competition.

Several large customers -- Microsoft, Amazon, and Alphabet -- have developed custom AI accelerators, called application-specific integrated circuits (ASICs), but they are unlikely to dethrone Nvidia GPUs because they lack ready-made software development tools. In other words, custom chips need custom software tools, and designing those products requires a great deal of technical expertise that most companies lack.

Nvidia introduced its CUDA software platform nearly two decades ago, and it has become an unparalleled ecosystem of code libraries, pretrained models, and frameworks that help developers build applications across use cases such as content generation, computer vision, predictive analytics, and autonomous machines. I/O Fund analyst Beth Kindig says CUDA affords Nvidia an "impenetrable moat."

Wall Street expects Nvidia's earnings to increase at 36% annually over the next three years, a sensible estimate, given that AI accelerator sales are forecasted to increase at 36% annually through 2030. That makes Nvidia's current valuation of 51 times earnings look reasonable. I have no doubt that Nvidia is on its way to a $5 trillion valuation, and I expect the company to hit that milestone well before 2030.

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Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, 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.