It wasn't terribly long ago that investors were watching four of the most highly valued companies on U.S. markets to see which would first top a market cap of $1 trillion. 

iPhone maker Apple (NASDAQ:AAPL) was the first to surpass the lofty benchmark in Aug. 2018, followed just one month later by e-commerce leader Amazon.com (NASDAQ:AMZN). Microsoft (NASDAQ:MSFT) made it a trio in April 2019. Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) was the last to cross the threshold, though it has since fallen below the mark.

Over the past few months, three analysts have each backed different horses in the race to $2 trillion. Let's look at the arguments to see which tech titan is the odds-on favorite to take the crown.

A mound of currency straps of one-hundred-dollar bills.

Image source: Getty Images.

The case for Apple

Apple, the current market cap leader, is valued at nearly $1.4 trillion as of Thursday's market close. Evercore ISI analyst Amit Daryanani believes this is just the tip of the iceberg, and that Apple has everything it needs to close in on $2 trillion over the next four years. Daryanani laid out the elements he believes will be necessary for the company to achieve this feat. 

Apple's services and wearables businesses must continue their double-digit growth to crest $100 billion and $60 billion, respectively, in four years. The services business and the wearables, home, and accessories segment -- which includes the AirPods and Apple Watch -- closed out fiscal 2019 with trailing-12-month revenue of $46.3 billion and $24.5 billion, respectively. Both are on track to achieve Daryanani's targets at current growth rates. Additionally, as the highly profitable services segment becomes a larger part of the equation, it will boost Apple's gross margins.  

This will drop more to the bottom line, resulting in higher profits. Daryanani estimates Apple's earnings per share will hit $23 to close out fiscal 2024. The company is on track to top $15 per share this year, so it's not outside the realm of possibility. Apple's earnings per share (EPS) have climbed 55% since mid-2016, so doubling from here is doable. Additionally, the company has been buying back shares hand over fist, with its share count declining by 20% over the same period. Those buybacks are expected to continue, reducing Apple's share count by about 1 billion by 2024 and further boosting its EPS. 

Daryanani believes these factors will result in the market assessing Apple's valuation to about 24 times forward earnings, calling it the "best risk/reward in large-cap tech."

An overhead view of a man comparing an e-commerce page on a laptop, tablet, and smartphone app on a white desk with two small office plants.

Image source: Getty Images.

The case for Amazon

Amazon trails Apple in the market cap department. The e-commerce giant was valued at $1.23 trillion to end the day on Thursday. However, with Amazon reaping the rewards of the stay-at-home economy, Jefferies analyst Brent Thill charted a course for the e-commerce leader to achieve a stock price of $4,000, which would result in a $2 trillion market cap by 2023.

With the onset of the pandemic and e-commerce adoption reaching unprecedented levels, Amazon has likely added millions of new Prime members over the past several months. Not only does the company benefit from the $119 annual subscriber fee, but research has also shown that Prime customers spend at nearly double the rate of nonmember customers. "We think that many who are experiencing for the first time the value, ease, and convenience of the service will decide to keep it, thus boosting Amazon's future growth," Thill mused. 

Amazon Web Services (AWS) -- the company's cloud computing subsidiary -- and recent digital advertising efforts are both likely "underappreciated" by investors. These higher-margin businesses will help boost Amazon's profits. Thill believes AWS alone could be worth $1 trillion by 2023.

Finally, the pandemic has accelerated the changing retail landscape by causing more stores to shutter. Amazon has captured even more of the spoils. These factors have pushed Amazon's market cap into a new and rarefied realm.

A man in business attire touching a virtual cloud icon.

Image source: Getty Images.

The case for Microsoft

Microsoft is the final entrant in this three-horse race, with a market cap of nearly $1.39 trillion at Thursday's market close. Wells Fargo Securities analyst Philip Winslow recently entered the fray, positing that Microsoft will reach a market cap of about $2 trillion. Winslow predicts that the company will do so over two years, pushing the stock to $283 in the process. 

Winslow argues that Microsoft's cloud computing advances have led the stock to these heights and will continue to do so in coming years. The pandemic has shown that not having a cloud strategy is a recipe for failure for many businesses. As more and more companies begin the digital transformation, Microsoft will continue to close the gap with AWS and widen its lead against Google Cloud.

If Microsoft continues its overall revenue growth of about 14% over the next few years while also generating EPS and free cash flow growth of about 17%, it will have a clear path to a $2 trillion valuation. Generating 20% growth from its intelligent cloud segment, increasing its productivity and business process segment by 10%, and boosting just 3% from Windows will push it over the finish line. Those segments increased in the first quarter by 27%, 15%, and 3%, respectively, so these estimates are by no means outlandish. 

One-hundred-dollar bills and various coins in a bird's nest against a white background.

Image source: Getty Images.

A race full of winners

In making the cases for each of these tech giants and their paths to $2 trillion, these analysts have taken their best shot at estimating a wide assortment of variables. Change any one of the inputs in their financial models -- even to the slightest degree -- and the results will vary widely.

Any one of these companies could actually be the first to pass the $2 trillion benchmark. Barring unforeseen circumstances, all three will likely do so in the coming years.

If I was forced to make a prediction as to who gets there first, I would choose Amazon. It is truly one of the most disruptive companies of our time. By expanding into an ever-widening ecosystem of businesses, it has considerably stacked the deck in its favor. 

What's truly remarkable about this exercise, however, is that it illustrates that even for the three biggest publicly traded companies in the U.S., there's still a significant potential for upside.

Investors always ask whether a given stock is a buy. In the case of each of these tech titans, I submit the answer is a resounding yes.