Apple (AAPL 2.23%) is the world's third-largest company, valued at $3.6 trillion. However, I think the next five years could see some other companies take over its high spot on the list, especially if it doesn't start growing at a faster rate. The four stocks I believe can pass Apple over the next five years are Microsoft (MSFT 0.48%), Amazon (AMZN 1.44%), Taiwan Semiconductor (TSM 4.55%), and Broadcom (AVGO 1.32%).
These stocks fall into two primary categories: big tech and chip makers. All four can pass Apple over the next four years, and I think they make for a far better investment than Apple.
Image source: Getty Images.
What's wrong with Apple?
First, we need to tackle why Apple won't be a good investment in 2026 and beyond. It really boils down to one thing: When's the last time Apple launched something new or innovative that actually caught on? It has been a long time, and Apple is surviving on past performance rather than new business. This could open it up to losing market share to more innovative competitors. Apple's revenue is growing, but at a slower-than-market pace (10% year over year).
AAPL Revenue (Quarterly YoY Growth) data by YCharts.
Thanks to its aggressive stock buyback program, Apple delivers about 10% diluted earnings per share (EPS) growth each quarter, so that's the bar these companies will have to go up against to see if they can outperform Apple.
Microsoft and Amazon are within striking distance
Microsoft has a $3.4 trillion market cap, and Amazon has a $2.5 trillion one. So, it won't take much for each company to rise past Apple, especially as it's growing slowly.
Microsoft has capitalized on the massive generative AI spending spree thanks to its cloud computing service, Azure. Azure has become a strong option to build AI applications on, as it offers several different generative AI models to choose from, including OpenAI's ChatGPT. Microsoft has a 27% ownership stake in OpenAI, so it will also benefit when it eventually goes public. Microsoft has consistently delivered mid- to high-double-digit EPS growth over the past few years, and this will easily be enough to propel Microsoft past Apple over the next five years.
NASDAQ: MSFT
Key Data Points
Amazon has a bit more work to do, but it's also growing at an incredibly fast pace. Revenue growth is the wrong way to assess Amazon's stock, as retail sales account for the majority of revenue, yet have poor margins. What investors should be focused on is how quickly its operating income is growing.
AMZN Operating Income (Quarterly YoY Growth) data by YCharts.
Although it slowed down in the third quarter, it should stay elevated as higher-margin divisions within Amazon are growing rapidly. This will allow Amazon's earnings to grow at a rapid pace and surpass Apple within five years.
AI spending is driving Broadcom and Taiwan Semiconductor higher
Broadcom and Taiwan Semiconductor have a long road ahead of them. They are each less than half the size of Apple, so they essentially need to triple over the next five years to surpass Apple. That's a tall task, but given how much is expected to be spent on artificial intelligence (AI) computing, these two can do it.
Taiwan Semiconductor believes it will grow its revenue at a 25% compounded annual growth rate (CAGR) through 2029. If we extend that growth rate a few years, which is possible if AI demand proves to be insatiable, that indicates its revenue could triple over the next five years. It won't be easy, but if it does, TSMC can be a larger company than Apple five years later.
NYSE: TSM
Key Data Points
Broadcom is in an even better space, as its custom AI accelerator chips are rapidly rising in popularity. For Q1, they expect 100% year-over-year growth for its custom AI chips, and that strength isn't expected to slow down anytime soon. Longer term, companies like Nvidia (NVDA 1.46%) have given projections that global data center capital expenditures (capex) will reach $3 trillion to $4 trillion by 2030, up from $600 billion in 2025. At the low end, that's a 38% CAGR.
We've already established that TSMC's 25% CAGR would be enough to surpass Apple, so if Broadcom can grow at the same rate as data center capex, it will easily surpass Apple over the next five years.
