Nvidia(NVDA -0.02%) has been on a tear, with a split-adjusted gain of about 2,470% over the past five years. As of Dec. 23, 2024, it is the second-most valuable publicly traded company in the U.S. stock market, with a market cap of more than $3.7 trillion. However, while Nvidia's stock price has soared, its valuation is high, with a price-to-earnings ratio of about 33. This suggests that there is a lot of growth priced into the stock, and its future performance may not be as impressive as its past. In this article, we will explore two stocks that have the potential to surpass Nvidia's market value within the next decade: Amazon(AMZN 1.77%) and Alphabet(GOOGL 0.76%)(GOOGL 0.76%).



Amazon and Alphabet have several key factors working in their favor that could drive significant growth over the next decade:

1. Dominant Market Share and Growth Opportunities:
- Amazon has a larger market share than its next 10 competitors combined in e-commerce, with only about 16% of U.S. retail sales coming from e-commerce, indicating substantial room for growth.
- Alphabet's Google Services segment, which includes Search, Gmail, YouTube, Chrome, and other consumer-facing products, could benefit from improving ad revenue in a strong economy and pro-business policies.

2. Growing Cloud Computing Market:
- Amazon Web Services (AWS) is expected to grow significantly as the cloud computing market is projected to roughly triple in size globally by 2032.
- Alphabet's Google Cloud is also a direct competitor with AWS and benefits from the same industry tailwinds.

3. Financial Flexibility and Profitability:
- Both companies have tremendous financial flexibility, with Alphabet generating bottom-line profits at a rate of more than $100 billion annually and having more than $93 billion in cash and short-term investments on its balance sheet.
- Amazon's AWS is the more profitable side of the business and could fuel double-digit earnings growth for years to come.

4. Adaptability and Innovation:
- Both companies have a history of adapting to changing markets and innovating in new areas, such as Amazon's cloud computing and same-day shipping services, and Alphabet's video-based social media and smartphones.
- Their ability to evolve and lead the charge into new markets contributes to their expected growth over the next decade.



While Nvidia's market dominance in AI chips could be challenged in the future by rival chipmakers and proprietary AI chips from tech giants, Amazon and Alphabet have the potential to build shareholder value in a more sustainable and predictable way. Their dominant market share, growth opportunities, financial flexibility, and adaptability make them strong contenders to surpass Nvidia's market value within the next decade.

In conclusion, while Nvidia has enjoyed remarkable growth and is currently the second-most valuable company in the U.S. stock market, its high valuation and potential challenges to its market dominance in AI chips suggest that its future performance may not be as impressive as its past. Amazon and Alphabet, with their dominant market share, growth opportunities, financial flexibility, and adaptability, have the potential to build shareholder value in a more sustainable and predictable way, potentially surpassing Nvidia's market value within the next decade.