These two cloud computing leaders have a better growth trajectory than the iPhone maker.
Apple is currently the second most valuable company in the world, with a market cap of $3.9 trillion. But is it actually an artificial intelligence (AI) loser? The smartphone maker has lost tons of AI talent and failed to make any inroads into this fast-growing field, while its competitors keep pushing the boundaries on innovations. It has no chatbot, and its Siri smart speaking service has not improved for what feels like a decade.
AI is the future of computing, and it looks like Apple is falling behind. This is evident in its slowing financial growth compared to the big tech competition. Here are two AI stocks betting on the future of cloud computing that will be worth more than Apple by year-end 2026.
Today’s Change
(0.56%) $1.51
Current Price
$271.21
Key Data Points
Market Cap
$4002B
Day’s Range
$268.50 – $274.10
52wk Range
$169.21 – $274.10
Volume
2.1M
Avg Vol
55M
Gross Margin
46.68%
Dividend Yield
0.00%
Amazon’s consistent cloud and automation growth
The first big tech company poised to usurp Apple is Amazon (AMZN 2.65%). Even though it has struggled to produce its own chatbot, Amazon Web Services (AWS) has built cloud products to help other companies deploy chatbots, among many other services. Over the last 12 months, AWS has generated $116.7 billion in revenue, growing 17% year over year. That compares to Apple, whose revenue has barely budged in the last three years combined.
Spending on AI cloud infrastructure should be a multiyear tailwind for AWS, especially due to its relationship with the fast-growing Anthropic start-up. What’s more, Amazon has plenty of room to utilize AI across its e-commerce ecosystem. It is deploying more and more robotics to make its warehouses and delivery network efficient, helping advertisers build ads with AI generators and implementing AI search tools on the Amazon website to improve the customer experience for Amazon shoppers. North American retail sales are growing 11% year over year, with profit margins expanding to 7% over the last 12 months. As more and more automation gets layered into Amazon’s retail operations, these profit margins should begin to increase.
Taken together, Amazon should keep growing its revenue and rapidly expand its profit margins over the next few quarters. Its earnings before interest and taxes (EBIT) was $77 billion over the last 12 months, and I expect it to surpass $100 billion in 2026. This is still below Apple’s $130 billion in trailing EBIT, but Amazon is closing the gap quickly and should get a higher earnings multiple than Apple due to this growth potential.
Alphabet’s underrated dominance
A severely underrated AI stock — at least perhaps until recently — is Alphabet (GOOG +3.17%) (GOOGL +3.10%). Owner of Google Search, YouTube, Google Cloud, and many other subsidiaries, Alphabet has all the assets a company would need in order to dominate in the AI field.
First, it has the research team and technology. The Gemini chatbot is best-in-class and gaining market share on the industry leader ChatGPT. Alphabet has superior data to train its AI on with Google Search, Gmail, and YouTube. It has its own homegrown computer chips called Tensor Processing Units (TPUs), meaning the company does not have to rely on Nvidia for its infrastructure, giving it a cost advantage when training its AI.
To top it all off, Alphabet has its own type of AWS in Google Cloud, which now does around $50 billion in annual revenue and is growing 32% year over year as of last quarter. No company has the assets today that can monetize the AI revolution like Alphabet, including its legacy Google Search and YouTube products that still have billions of users around the globe.
Alphabet’s revenue grew 13% year over year in constant currency last quarter. As with Amazon, this is faster growth than Apple. Its EBIT was $121 billion over the last 12 months and should surpass Apple’s in 2026.
Bet on the future, not the past. Alphabet and Amazon have soaring earnings power and should leave Apple in the dust when it comes to market capitalization at some point in 2026. Even if that doesn’t happen next year, both are great stocks to buy and hold for the long haul.
