Prediction: 2 Stocks That'll Be Worth More Than Apple 3 Years From Now

Let's get one thing out of the way: Apple (AAPL 3.62%) is an excellent company. It boasts one of the most valuable brand names in the world, an army of loyal customers, and has consistently proven its innovative qualities over time. However, the tech leader has faced challenges lately, one of which is the threat of tariffs. Furthermore, Apple has fallen behind some of its similarly sized tech peers in the rapidly expanding artificial intelligence (AI) market.

The tailwind AI is providing to two of them, Amazon (AMZN 0.17%) and Alphabet (GOOG 8.93%) (GOOGL 9.00%), could enable both to surpass Apple in terms of market capitalization within the next three years. Here's why Amazon and Alphabet look like better buys right now.

1. Amazon

Amazon's current market cap is $2.4 billion, compared to Apple's $3.4 trillion. That sounds like a massive difference, but it's worth noting that Amazon has consistently grown its revenue faster than its peers over the past three years, despite having higher sales numbers.

AMZN Revenue (Quarterly) data by YCharts

The e-commerce specialist should maintain that momentum for several reasons. First, it remains a leader in the cloud computing market. Even as it loses ground to some of its closest competitors, Amazon's cloud unit, Amazon Web Services (AWS), remains a strong performer. The company's AWS sales in the second quarter increased by 17.5% year over year to $30.9 billion, outpacing the rest of the business. AWS is also responsible for most of Amazon's profits.

Second, Amazon is capitalizing on the rise of AI, thanks to a suite of AI-related services it offers through its cloud. The company is also implementing the technology in-house. For instance, Amazon's industrial robots utilize AI-powered algorithms to optimize travel distances in the company's warehouses, enabling them to handle and deliver packages more efficiently and cost-effectively.

Third, Amazon's advertising business should represent yet another important growth driver. As of the end of 2024, the company's advertising revenue run rate was $69 billion, more than doubling since 2020. Amazon is one of the most visited websites in the world, making it an attractive hub for advertisers. These three growth drivers -- the cloud, AI, and advertising-- should maintain solid momentum in the next three years, and well beyond that, for that matter.

CEO Andy Jassy believes we are still in the early innings of the cloud and AI revolutions. Amazon's most important business, cloud computing, is less exposed than Apple to tariff-related concerns. True, if President Donald Trump's policies lead to an economic downturn, spending will decrease for consumers and businesses, resulting in lower revenue for the company's e-commerce and cloud units. Even so, this potential challenge would also impact Apple. Additionally, the latter may have to contend with heavy tariffs on imported goods from abroad, which would disrupt its primary source of revenue and profits.

Lastly, Amazon's forward price-to-earnings (P/E) of 34.6 may be higher than Apple's 29.2, but the former's premium is well-deserved. Amazon is well-positioned to outpace Apple in the next few years and become a more valuable company by market cap. It should deliver excellent results well beyond that.

2. Alphabet

Alphabet's market cap is $2.5 trillion. It has also grown its revenue faster than Apple much more often than not in the past three years, and has not surpassed the iPhone maker in quarterly sales.

GOOG Revenue (Quarterly) data by YCharts

Alphabet's advertising business remains its biggest source of sales, thanks to the company's dominance in search. Even AI chatbots haven't made a significant impact on Alphabet's search empire, especially as the company has adapted to this new landscape. Alphabet has added the now highly successful AI overviews to its search engine. Elsewhere, the company's cloud and AI businesses are helping supercharge top-line growth. In the second quarter, Alphabet's cloud division grew by almost 32% year over year, much faster than even AWS.

The parent company of Google recently signed a $10 billion, six-year cloud deal with Meta Platforms. In other words, business is booming for Google Cloud. The rest of Alphabet's business, including YouTube, a leader in the streaming industry, is also performing well.

Yet, the stock's forward P/E is 22, much lower than Amazon's and Apple's. The market remains concerned that Alphabet may be forced to sell its Chrome browser as part of an antitrust lawsuit, which could significantly disrupt its advertising business. If that happens, Alphabet's shares will plunge. It's worth keeping that risk in mind, while also remembering that forcing companies to divest part of their operations in high-profile antitrust cases is a very rare outcome for the U.S. government. If Alphabet can overcome this obstacle, though, the stock will soar and, over the next three years, could perform well enough to overtake the battered Apple.