Nvidia seems to stand alone in the minds of S&P 500 investors. But there's one company that stands in its way to dominance.
Microsoft, also a key player in AI, is seen being worth $3.7 trillion in 12 months based on analysts' estimates, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
That's would make Microsoft stock the only S&P 500 company valued more than Nvidia in a year's time. Analysts think Nvidia will be the No. 2 most-valuable S&P 500 company in a year, weighing in at $3.68 trillion.
Nvidia Plays Second Fiddle?
It might be surprising to see Nvidia trailing any S&P 500 stock at anything. After all, it's a dominant force in the ongoing third-quarter earnings season.
"The information technology sector is expected to report the highest year-over-year earnings growth rate of all S&P 500 sectors (15.6%)," said Megan Horneman, chief investment officer at Verdence Capital Advisors, citing FactSet data. "If Nvidia were excluded from the information technology sector, year-over-year earnings growth would be lower (8%)."
But following a 190% gain this year to 143.59, analysts aren't putting big price targets on Nvidia. Analysts only think Nvidia stock will rise 4.4% in the next 12 months. And that's with some bullish earnings targets. Analysts think Nvidia's earnings will rise 294% in 2024 and 119% in 2025. The stock already carries a perfect 99 Composite Rating.
Is Microsoft Stock A Buy? Here's The IBD Take
Microsoft Is No. 1?
In contrast, analysts think Microsoft shares will rise nearly 17% in 12 months. It's an easier call to make as the stock is only up 13.7% this year with an RS Rating of 45.
Microsoft's market value of $3.2 trillion trails Nvidia's $3.5 trillion now.
Microsoft is no slouch, however. Analysts see 20% earnings growth this year and 12% in 2025. Its Composite Rating is 69.
What about Apple? Currently, Apple is worth more than any other S&P 500 company at $3.58 trillion due to a 23% jump this year. But analysts think Apple shares will gain just 2.1% in 12 months. If that proves right, Apple would only be the third most-valuable S&P 500 company at $3.66 trillion in a year's time.
Maybe that will make Warren Buffett feel a little better about panic-selling Apple shares this year.
Most Valuable S&P 500 Companies Next Year
Based on analysts' 12-month price targets
| Company | Ticker | Sector | Market value target ($ trillions) |
|---|---|---|---|
| Microsoft | MSFT | Information Technology | $3.71 |
| NVIDIA | NVDA | Information Technology | $3.68 |
| Apple | AAPL | Information Technology | $3.66 |
| Alphabet | GOOGL | Communication Services | $2.5 |
| Amazon.com | AMZN | Consumer Discretionary | $2.3 |
| Meta Platforms | META | Communication Services | $1.5 |
| Berkshire Hathaway | BRKA | Financials | $1.1 |
| Eli Lilly | LLY | Health Care | $0.9 |
| Broadcom | AVGO | Information Technology | $0.9 |
| Walmart | WMT | Consumer Staples | $0.7 |
