Apple (AAPL +1.25%) is one of the world's three largest companies and has a $3.9 trillion market cap. Its stock recently got a boost on reports of strong iPhone 17 sales, with Counterpoint Research noting that series 17 sales have outpaced series 16 sales in its first 10 days by 14%. However, analysts at Keybanc noted that a survey showed it did not see much follow-through coming next year.
NASDAQ: AAPL
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Meanwhile, Apple's biggest strength is its ecosystem, which keeps consumers locked into its products and buying more of its services. Apple's services segment comes with higher gross margins, which helps drive profitability growth, but overall growth has still been relatively modest.
Last quarter, its revenue rose by 10%, while its earnings per share (EPS) grew by 12%, which was one of its strongest quarters in quite some time. At the same time, the stock carries a pretty robust valuation, trading at a forward price-to-earnings (P/E) ratio of around 29 based on fiscal 2026 analyst estimates (ending September 2026).
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The reason Apple might be surpassed by some of its megacap peers in the coming years comes down to its stock trading at a higher valuation and growing less quickly. Meanwhile, it does not have the same clear artificial intelligence (AI) path in place as many others. Let's look at why Amazon (AMZN +1.43%) and Alphabet (GOOGL +2.73%)(GOOG +2.70%) could overtake the iPhone maker in the next five years.
Amazon
Sitting with a market cap of $2.4 billion, Amazon is still much smaller than Apple. However, the stock is a tad cheaper, trading at 28.7 times next year's analyst earnings estimates, and it's been growing its earnings at a quicker pace. Last quarter, Amazon saw its sales climb 13% year over year to $167.7 billion while its EPS surged 33% to $1.68. That's much faster than Apple's 12% EPS growth.
Amazon's profitability growth is being led by the operating leverage it is seeing in its e-commerce operations. The company has invested heavily in robotics and AI to help drive down costs and become more efficient, which is leading profit growth to far exceed sales. It's also seeing strong momentum in its sponsored ads business, which carries much higher gross margins and is one of its fastest-growing areas, despite the company being one of the largest digital advertising companies in the world.
NASDAQ: AMZN
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Meanwhile, its cloud computing unit, AWS, is the market share leader, and a recent outage showed just how much the world actually relies on AWS. The segment is also Amazon's most profitable and fastest growing; however, its growth is trailing its peers. That could be about to change, though, as it should start to see growth accelerate as it adds more capacity to keep up with demand from its largest customers, such as Anthropic, which it also owns a large stake in.
Amazon also has several emerging bets, including Project Kuiper, a satellite broadband network that it's building to deliver high-speed internet around the globe. It currently has around 150 satellites in orbit with a goal of 200 by year-end, and it plans to begin offering service in five countries by the end of March. It is eventually looking to launch more than 3,200 satellites. Satellite internet could eventually challenge traditional providers and be a big growth driver within the next five years or so.
Amazon doesn't get nearly enough credit for its leadership in areas like robotics and cloud computing, and the stock could easily rerate much higher if growth begins to accelerate, allowing it to surpass Apple in the next several years.
Alphabet
Alphabet is perhaps in an even better position to surpass Apple's market cap in the coming years. With a $3.15 trillion market cap, it's a bit closer in size to Apple than Amazon. It also trades at a nice discount to the iPhone maker, with a forward P/E of under 24 times 2026 analyst estimates, and is growing more quickly. Last quarter, Alphabet's revenue climbed 14% while its EPS jumped 22%.
Like Amazon, Alphabet's growth is being led by its cloud computing division. In Q2, Google Cloud revenue soared 32%, while segment operating income more than doubled. Meanwhile, Google Cloud is very well positioned moving forward, given that it has the most complete tech stack of any cloud provider with its own leading large language model in Gemini, top-notch custom AI chips called Tensor Processing Units, a strong software offering, and even its own private fiber network.
NASDAQ: GOOGL
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Its search business, meanwhile, is beginning to see growth start to accelerate with the help of AI. It has introduced several new AI features, including Circle to Search, Lens, and AI Overviews, that are helping drive more queries, while its new AI Mode combines traditional search and a chatbot all in one place.
Alphabet also has other long-term bets that could add meaningful value in the next five years. Its Waymo robotaxi business is growing quickly and has a big first-mover advantage. If the business can continue to scale and turn profitable, it will nicely help boost growth. Its quantum computing efforts should also not be overlooked, as technology continues to advance at a breakneck pace.
Between its much cheaper valuation and stronger growth prospects, I'd expect Alphabet to become larger than Apple within the next five years.
