Dan Ives, the global head of technology research at Wedbush Securities, predicts that one big tech company’s market cap will hit $5 trillion next year.
In a new CNBC Television interview, the investor says that the current market cap of Microsoft (MSFT) will soar by more than $1.1 trillion by the end of next year, after the company’s latest earnings came in this week.
“We think Microsoft’s going to be a $5 trillion market cap in 2026 … when I look at what [Microsoft CEO Satya] Nadella is doing in terms of the cloud strategy, those are [cloud computing platform] Azure numbers that were beyond bull case…
When you think about the big tech growth story in the AI (artificial intelligence) revolution, this is just the next phase of growth that’s now going to the second, third, fourth derivative.”
Microsoft has a market cap of $3.896 trillion and is trading for $524 per share at time of writing. Meanwhile, Nvidia is trading for $173 per share at time of writing and has a market cap of $4.23 trillion.
Next up, Ives warns that while Apple’s earnings this week showed promise, the company is falling behind when it comes to AI.
“Right now, [Apple’s] essentially on a park bench drinking lemonade, watching the AI revolution go forward… It was a robust quarter. I mean, you look at the demand bounce back that we saw in China, 4% growth…
But the elephant in the room is AI… Investors want to see them now change the status quo.”
Meanwhile, Ives believes Amazon’s profits will continue to increase.
“If you look at AWS (Amazon Web Services), strong. You look at ultimately guidance, I mean guidance from a top-line perspective, I believe it’s pretty robust. I actually believe this is sort of the renaissance of growth that’s about to happen at Amazon.”
Apple has a market cap of $3.02 trillion and is trading for $202 per share at time of writing. Meanwhile, Amazon is trading for $214 per share at time of writing and has a market cap of $2.28 trillion.
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