Prediction: This Company Could Be Among the First to Reach a $5 Trillion Valuation

Back in October, Nvidia became the first company with a market cap exceeding $5 trillion.

Nvidia's stock has since pulled back from that lofty level, but one big rally might be all it takes to lift the AI chip giant back above that value in 2026. Not only that, a few other companies could join that exclusive club, too.

For instance, as my fellow Motley Fool contributor Harsh Chauhan noted in an article on Dec. 20, Microsoft could conceivably hit that market cap milestone in the coming year.

In my view, another "Magnificent Seven" member also looks to be on the verge of joining the $5 trillion club: Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

Image source: Getty Images.

Why Alphabet is so close to hitting this milestone

Alphabet shares have surged by 65% year to date. The primary reason for this has been the company's success in catching up to early adopters of generative artificial intelligence (AI) like Microsoft and OpenAI. Alphabet's Gemini 3 has given ChatGPT a run for its money.

More importantly, the AI Overviews and AI Mode features on the Google search engine have helped to increase user engagement with the platform. This has alleviated investors' initial concerns that the growing use of AI chatbots to answer people's questions would cut into Alphabet's primary profit center, search advertising.

Thanks to this year's significant share price run-up, Alphabet now has a market cap of $3.8 trillion. That means all it'll take for the company to reach a $5 trillion market cap is for it to appreciate in value by another 31.6%. Not only is that well within the realm of possibility in the next few years, there's a chance it could happen between now and next December. It all has to do with near-term earnings growth, coupled with the potential for the stock to experience further valuation expansion.

Could it happen next year?

According to sell-side analysts' estimates, Alphabet's earnings per share (EPS) could rise by over 41% between now and the end of 2028. This strongly suggests that it's a matter of when, not if, Alphabet will join the $5 trillion club.

However, a move to that market cap could arrive as soon as 2026. Yes, the average sell-side analyst's earnings forecast may only call for 6% EPS growth next year, but those predictions may be too conservative. Even as Alphabet plans to ramp up spending on AI and cloud infrastructure, the payoff from these investments could take shape sooner than expected.

In fact, we may already be witnessing this: Google's overall queries and revenue are growing by double-digit percentages thanks to AI integration. The sell-side forecasts at the high end of the range call for earnings growth of as much as 24% in 2026. Even if growth lands somewhere between the average and high end of the forecast range, that may lift the stock price by enough to get the company over the $5 trillion mark.

Shares currently trade for around 28 times expected forward earnings. If high growth persists into the coming year and bullishness about AI returns, names like Microsoft could again trade at forward P/Es in the mid-30s, and Alphabet could experience a similar rerating. Considering its plausible path to a $5 trillion market cap, Alphabet may be one of the first stocks investors should buy for the new year.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, 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.