Prediction: 1 AI Stock Will Be Worth More Than Apple Stock by Year-End in 2026

Source The Motley Fool

Currently, Apple is the most valuable publicly listed company in the world, with a market capitalization of $3.6 trillion as of Feb. 17. But I think Amazon (NASDAQ: AMZN) will top that figure before the year's end in 2026.

Amazon is currently a $2.4 trillion company. But a 54% increase in its share price would bring its market value to $3.7 trillion, slightly more than Apple is worth today. In other words, my prediction implies 54% upside for Amazon shareholders in a little less than two years.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Here are the important details.

Amazon is using artificial intelligence (AI) across its retail and cloud businesses

Wall Street estimates Amazon's earnings will increase at 17% annually through 2026. That consensus makes the current valuation of 41 time earnings look reasonable. But analysts have consistently underestimated the company's earnings. Amazon beat the consensus estimate by an average of 29% over the last six quarters, according to LSEG.

I think analysts are making the same mistake with their current estimates, but this time the catalyst is artificial intelligence (AI). Amazon has the most-visited and largest e-commerce marketplace outside of China in terms of sales, and the company is using AI to recommend products, improve customer service, enhance inventory allocation, and boost fulfillment efficiency with robotics.

CEO Andy Jassy on the fourth-quarter earnings call told analysts, "We have a number of very significant, I'll call it, productivity and cost-savings efforts in our retail business that are using generative AI." Admittedly, some of those investments may hurt margins in the near term, but should increase profitability in the medium term.

Morgan Stanley analyst Brian Nowak thinks those investments will drive market share gains in e-commerce for Amazon, while also widening the company's ability to "deliver more items faster and more profitably than peers." Importantly, retail e-commerce sales are projected to increase at 11% annually through 2030. But Amazon's retail earnings should grow more quickly as the company gains share and its profit margin expands.

Furthermore, Amazon Web Services (AWS) is the largest public cloud in the world in terms of revenue, and public cloud spending is forecast to grow at 21% annually through 2030, according to Grand View Research. As the largest public cloud, AWS has a key advantage in monetizing AI simply because it has more customers and partners than its peers.

However, AWS has also released nearly twice as many machine learning and generative AI features as other leading cloud providers during the last two years, according to CEO Andy Jassy. Those products create new monetization opportunities, which could ultimately lead to faster earnings growth than analysts anticipate.

An upward-trending candlestick chart overlaid with a metallic dollar sign, beneath which are written the months of the year.

Image source: Getty Images.

Amazon could achieve a $3.7 trillion market value by year-end in 2026

Amazon reported earnings of $5.53 per diluted share over the last four quarters, up 91% versus the previous 12-month period. The Wall Street consensus says that figure will reach $7.11 per diluted share by the third quarter of 2026, which implies total earnings growth of 28% during that period.

However, assuming the consensus earnings forecast is 20% too low -- which is less than the average shortfall of 29% during the past six quarters -- Amazon's earnings will hit $8.53 per diluted share in the third quarter of 2026. That number implies total earnings growth of 54% over the next seven quarters.

In that scenario, Amazon shares could increase 54% without any change in the underlying price-to-earnings multiple. Consequently, the company would achieve a market value of $3.7 trillion following its third-quarter report in 2026, in which case Amazon before the end of the year would be worth more than Apple is today.

Admittedly, my prediction is aggressive and could be derailed by economic factors beyond the company's control. For instance, consumer and business spending may falter if inflation continues to increase. However, even if Amazon falls short of $3.7 trillion in 2026, I think the stock will beat the S&P 500 over the next five years. So, patient investors should feel comfortable buying a small position today.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $360,040!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,374!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $570,894!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 3, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Apple. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD drifts lower below $2,800   after Trump imposes tariffsGold price (XAU/USD) edges lower to around $2,795 during the early Asian session on Monday.
Author  FXStreet
Feb 03, Mon
Gold price (XAU/USD) edges lower to around $2,795 during the early Asian session on Monday.
placeholder
U.S. March Nonfarm Payroll Preview: Even If Data Aligns with Expectations, Financial Markets May Not Escape the Fate of VolatilityOn 4 April 2025, the United States will release its March Nonfarm Payrolls (NFP) data. The market consensus currently anticipates job growth of 128,000, a decline from February’s 151,000 (Figure 1). W
Author  TradingKey
Apr 02, Wed
On 4 April 2025, the United States will release its March Nonfarm Payrolls (NFP) data. The market consensus currently anticipates job growth of 128,000, a decline from February’s 151,000 (Figure 1). W
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Gold Price Forecast: XAU/USD attracts some sellers below $3,250 on firmer US DollarThe Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
Author  FXStreet
Yesterday 02: 14
The Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
placeholder
Ripple Price Forecast: XRP builds bullish momentum as Ripple eyes Circle with $5B acquisition bidRipple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
Author  FXStreet
18 hours ago
Ripple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
goTop
quote