Prediction: 2 artificial intelligence (AI) stocks will be worth more than Apple by 2030 (hint: not Nvidia)

The Next Tech Titans: Two AI Stocks Poised to Outperform Apple by 2030 (It's Not Who You Think!)

In the rapidly evolving landscape of artificial intelligence, many investors immediately look to the established giants. While Nvidia has already achieved a staggering $4.3 trillion market value, a bold prediction suggests that two other AI-centric companies, Meta Platforms and Broadcom, are on a trajectory to eclipse even Apple's current impressive $3.1 trillion market capitalization within the next five years. This isn't just a speculative claim; it's backed by their strategic positioning and growth potential in the AI revolution.

For Meta Platforms to reach a $3.2 trillion valuation, its stock would need to gain approximately 88%, translating to annual returns of about 13.5% over five years. Broadcom, currently valued at $1.4 trillion, would require a 129% advance, implying annual returns of roughly 18% to hit the same mark. Let's delve into why these predictions hold significant weight.

Meta Platforms: Leveraging AI for Engagement and Beyond

Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, commands three of the world's most popular social media platforms. This immense user base and rich data collection capabilities make Meta an invaluable partner for advertisers, positioning it as the second-largest ad tech company globally, only behind Alphabet's Google.

Central to Meta's recent successes is its masterful application of artificial intelligence. By deploying AI to refine content recommendations, Meta has demonstrably boosted consumer engagement across its platforms. In recent quarters, time spent on Facebook increased by 7% and on Instagram by 6%. This AI-driven improvement isn't just about user stickiness; it also extends to empowering marketers.

The company has seen a 30% surge in advertisers utilizing its AI creative tools in the first quarter alone. Enhanced ad targeting for Reels has resulted in a 5% increase in conversion rates. Furthermore, Meta has introduced innovative AI features that enable marketers to transform static images into dynamic videos, integrate conversational AI agents directly into advertisements, and seamlessly translate campaigns into multiple languages. These advancements provide clear, immediate value to businesses leveraging Meta's advertising ecosystem.

Beyond its robust AI applications in social media and advertising, Meta is also making strategic inroads into future technologies. The company is the undisputed leader in the nascent smart glasses market, a segment that tripled in size last year and is projected to expand by over 60% annually through 2029. CEO Mark Zuckerberg envisions a future where smart glasses, equipped with holographic displays, could fundamentally replace smartphones. This long-term vision offers a compelling growth vector independent of the immediate AI-driven advertising gains.

From a financial perspective, Wall Street analysts anticipate Meta's earnings to grow by 15% annually over the next three to five years. This projection makes its current valuation of 27 times earnings appear quite reasonable. If Meta sustains this 15% annual earnings growth through 2030, its market value could indeed surge by 88% to $3.2 trillion, even if its valuation multiple slightly adjusts to 25.5 times earnings. This growth trajectory seems entirely plausible given its strategic investments in AI and emerging technologies.

Broadcom: Powering the AI Infrastructure

Broadcom stands as a critical enabler of the artificial intelligence revolution through its infrastructure software and semiconductor solutions. The company holds dominant market positions in Wi-Fi chipsets, which facilitate wireless connectivity for devices like smartphones, and Ethernet switch chips, essential for high-speed data transfer within data centers. As AI workloads become increasingly pervasive and demanding, the need for Broadcom's high-speed networking chips will only intensify.

Crucially, Broadcom is also the leading supplier of custom AI accelerators, known as application-specific integrated circuits (ASICs). These specialized chips are designed to optimize AI computations. Broadcom currently develops AI ASICs for seven hyperscale clients, an elite roster that includes tech giants such as Apple, Google, Meta Platforms, ByteDance, and OpenAI, alongside two other undisclosed major customers. Analysts at Morgan Stanley predict the market for AI ASICs to expand at an impressive 34% annually through 2030, highlighting a significant growth runway for Broadcom.

Considering its financial outlook, Wall Street forecasts Broadcom's adjusted earnings to grow by 20% annually through 2028. While its current valuation of 52 times adjusted earnings might seem high, this growth potential makes it tolerable. If Broadcom achieves 20% annual earnings growth through 2030, its market value could soar by 129% to $3.2 trillion, even with a slight valuation adjustment to 47 times earnings. While this ascent might be more challenging than Meta's, it remains a distinct possibility.

Broadcom's consistent outperformance, beating consensus earnings estimates by 4% over the past six quarters, suggests that analysts might be underestimating its future earnings growth. Furthermore, management's own projections indicate that AI chip revenue alone could more than quadruple by 2027, underscoring the company's strong conviction in this segment.

Seizing the AI Opportunity

The narrative around AI investing often centers on a few dominant players. However, Meta Platforms and Broadcom present compelling cases as future leaders, each leveraging AI in distinct yet powerful ways. Meta is enhancing user engagement and revolutionizing digital advertising while eyeing the next computing platform with smart glasses. Broadcom, on the other hand, is the foundational layer, providing the essential chip infrastructure that powers the entire AI ecosystem. Both are poised for significant growth as AI continues to reshape industries.

As the AI revolution accelerates, identifying companies strategically positioned for sustained long-term growth is paramount. Meta Platforms and Broadcom exemplify this potential, offering investors a unique opportunity to participate in the burgeoning AI market beyond the obvious choices. Consider how these insights might inform your own investment strategy for a smarter, richer future.