Some predictions are far out on a limb, while others could easily become reality. I'm about to make one that's in the latter category.
I predict that Nvidia (NVDA -1.44%) is about to leap past Microsoft (MSFT -0.66%) to become the world's most valuable company. And when I say "about to leap past," I mean it could happen within the next few weeks or even days.
Image source: Getty Images.
Nvidia's already breathing down Microsoft's neck
I'm by no means going out on a limb with my prediction. Nvidia only needs a gain of around 4% for its market cap to eclipse Microsoft's. All it would take is some good news for the graphics processing unit (GPU) maker. We might not have to wait long.
Nvidia is scheduled to announce results for its fiscal 2026 first quarter following the market close on May 28, 2025, and quarterly updates can frequently provide positive catalysts. Could Nvidia's fiscal Q1 update be enough to spark a gain of 4% or more? Absolutely.
Wall Street expects Nvidia to report revenue of roughly $43 billion and earnings of $0.87 per share. The company's Q1 guidance calls for revenue in line with analysts' estimates, within a range of plus or minus 2%.
Should Nvidia significantly beat revenue and earnings expectations, though, its stock could soar. Perhaps an even better story to come out of its Q1 update, though, would be if the company provides an especially upbeat outlook for the rest of the year.
Is it a slam dunk that Nvidia's quarterly update will give it the needed bump to vault past Microsoft? No. However, positive news could at least set the stage for Nvidia to slowly build its market cap over the next few months and still become the world's most highly valued company.
How Nvidia and Microsoft stack up
Of course, Microsoft's market cap could grow just as fast -- or even faster than -- Nvidia's. I don't think that will happen, though. Why? Let's look at how these two tech stocks stack up against each other.
First, Nvidia beats Microsoft like a drum when it comes to revenue growth. Microsoft reported year-over-year revenue growth of 13% in its fiscal 2025 Q3, which ended on March 31, 2025. Nvidia's revenue soared 78% year over year in its fiscal 2025 Q4.
It's a similar story with earnings. Microsoft's earnings jumped 18% year over year in its latest quarter. Nvidia's earnings, based on generally accepted accounting principles (GAAP), skyrocketed 82% year over year, while its non-GAAP earnings were 78% higher than the prior-year period.
Importantly, more of Microsoft's growth is baked into its share price than is the case for Nvidia. Microsoft's price-to-earnings-to-growth ratio (PEG), which is based on analysts' five-year earnings growth projections, is 2.13. Nvidia's PEG ratio is 1.94, reflecting a more attractive valuation when growth prospects are factored in.
How could this prediction be wrong?
When I make a prediction, I like to acknowledge that I could be wrong -- and I could be wrong about Nvidia leaping past Microsoft. If that turns out to be the case, it will probably be because concerns about U.S. trade policies, slowing demand for artificial intelligence (AI chips), and increasing competition hold Nvidia back.
I could also be right only briefly as a result of these issues. It's quite possible that Nvidia's market cap will temporarily grow larger than Microsoft's, only to quickly relinquish the lead.
On the other hand, my prediction could come true spectacularly and sustainably. I can envision some scenarios where this could happen. For example, a major AI breakthrough (perhaps with artificial general intelligence) could create surging demand for Nvidia's GPUs.
We could soon find out if Nvidia will become the world's most valuable company. Even if it doesn't, I expect the stock to deliver strong returns for investors over the rest of this decade.
