Over the past seven years, the market capitalizations of several top tech companies soared past the $1 trillion mark. Those gains were largely driven by the secular expansion of the cloud, artificial intelligence (AI), digital advertising, and chipmaking markets.
Two of those high-flying trillion-dollar stocks were Nvidia (NVDA 1.21%) and Meta Platforms (META 2.45%). Investors might be reluctant to invest in these two stocks after their gains over the past few years, but I think they're still safe to double up on right now.
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Nvidia
Nvidia's stock surged more than 21,000% over the past decade, turning it into the world's most valuable company with a market capitalization of $4.3 trillion. That rally was mainly driven by its brisk sales of data center GPUs for processing complex machine learning and AI tasks.
Nvidia now controls more than 90% of the discrete GPU and data center GPU markets, and nearly all of the world's top cloud and AI companies use its chips. It locks in those customers with CUDA (Compute Unified Device Architecture), its proprietary programming platform optimized for its own chips. In other words, it has plenty of room to grow because it will continue to sell the best picks and shovels for the AI gold rush for the foreseeable future.
NASDAQ: NVDA
Key Data Points
Nvidia might face competition from cheaper data center GPU makers like AMD (AMD 3.22%) and custom AI accelerator chips built by its top customers, but its first-mover's advantage, "best in breed" reputation, and CUDA's stickiness should continue to drive its long-term growth. Its sales to China could also rise again if the U.S. relaxes its export curbs for AI-related chips.
From fiscal 2025 (which ended this January) to fiscal 2028, analysts expect Nvidia's revenue and adjusted EPS to grow at a CAGR of 46% and 29%, respectively. Those are incredible growth rates for a stock that trades at just 23 times next year's earnings.
While Nvidia might not replicate its millionaire-making gains from the past decade, it still has plenty of upside potential as the AI boom continues. Therefore, investors shouldn't be shy about doubling their existing positions in Nvidia -- even if the market seems a little frothy.
Meta Platforms
Meta Platforms' stock rallied more than 500% over the past decade, turning it into the world's sixth most valuable company with a market cap of $1.6 trillion. That growth was mainly driven by the expansion of its core social media platforms -- Facebook, Instagram, Messenger, and WhatsApp -- which now serve 3.54 billion daily active people (DAP) worldwide.
That massive audience makes it an essential digital advertising platform, and it holds a near-duopoly in digital ads with Alphabet's (GOOG 1.54%) (GOOGL 1.70%) Google across most of the world. Its total ad impressions and prices are also constantly rising, even as it faces fierce competition from ByteDance's TikTok and other social media platforms.
NASDAQ: META
Key Data Points
Meta's stock pulled back over the past few months as investors fretted over its rising AI infrastructure expenses and ongoing investments in its money-losing Reality Labs division. But from 2024 to 2027, analysts still expect its revenue and EPS to grow at a CAGR of 18% and 12%, respectively, as it gains more users, expands its ecosystem with Reels and Threads, and upgrades its AI algorithms to streamline its internal operations and craft better targeted ads.
Meta's stock looks reasonably valued at 22 times next year's earnings, and it remains a balanced play on the secular growth of the social media and digital advertising markets. Its Reality Labs investments could also pay off over the next few years as more consumers adopt its augmented reality and virtual reality devices. Investors who double their positions in Meta today and tune out the near-term noise could be well-rewarded over the long term.
