It is difficult to make long-term predictions. Who would have predicted that 10 years ago? Nvidia Will it be one of the largest companies in the world by market capitalization? Very little.
Despite this uncertain future, I think it's helpful for investors to look ahead five to 10 years and consider what types of companies have the potential to become even bigger than they are today. I still believe. If not, you're just groping in the dark and should buy an index fund instead.
I'm not sure, but I think it's one of the giants from the Magnificent Seven. Amazon (NASDAQ:AMZN) and alphabet (NASDAQ:GOOG) (NASDAQ:Google) will be the world's two largest companies by 2030. Here's why:
1. Amazon: Put everything in the cloud
Amazon's culture of innovation has helped it win across several large product categories. Most of us know that it is North America's dominant e-commerce platform, bringing in hundreds of billions in sales annually. But it's not currently Amazon's most profitable segment. That distinction lies with Amazon Web Services (AWS).
AWS is the world's largest cloud infrastructure provider, with revenue of $91 billion and operating income of just under $25 billion last year. Its main competitors are: microsoft Although there are Azure, Google Cloud, and other smaller providers, AWS has remained the largest cloud service since its inception nearly 20 years ago, with approximately 31% market share.
Although AWS is already large, there is still plenty of room for the cloud to gain market share compared to traditional computing solutions. Analysts expect this industry to grow at a rate of 19% until 2030. If AWS can maintain its market share and profit margins, the sector's revenue will increase by 19% annually, reaching more than $90 billion in 2030. There are monster e-commerce sectors, international expansion in countries such as India, and moonshots like Project Kuiper Internet Services, which will make Amazon one of his two largest companies in the world by 2030. I think there's a good chance it will happen.
2. Alphabet: Multiple avenues for growth
And who will be the other one? Well, all we have to do is consider one of Amazon's cloud computing competitors.
Alphabet is the parent company of Google Search, YouTube, Google Cloud, and other projects such as self-driving company Waymo. Google Cloud should be able to enjoy similar growth benefits as AWS, going from an annual revenue of $36 billion at the end of 2023 to nearly $100 billion by 2030. This should create tremendous value for Alphabet, but it's not the only ace. Up to the sleeves.
First, we need to highlight Google search and the revenue it generates. The world's dominant search engine generated $48 billion in revenue in the fourth quarter of 2023 alone, and within a few years annual revenue should reach his $200 billion mark. As the primary advertising engine for many industries such as travel, insurance, and financial services, Google search revenue should grow along with global GDP as more people around the world start using smartphones and the internet.
Let's not forget about YouTube. Alphabet owns the world's largest video platform, generating $9.2 billion in ad revenue last quarter. YouTube has billions of users around the world and is the most popular streaming video service on American television. Yes, this is a US TV, not all devices.
YouTube has become a mainstream source of entertainment for people around the world. I think this trend will become even stronger in 2030.
Last year, Alphabet generated $85.7 billion in operating profit. With so many avenues for growth, it seems likely that the company will continue to grow its earnings in the coming years. By 2030, I think this will cause the giants of the Magnificent Seven to overtake the likes of: apple The company has partnered with Microsoft to become one of the world's two largest companies alongside Amazon.
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Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Brett Schaefer has held positions at Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: His long January 2026 $395 call on Microsoft and his short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
Opinion: These 2 'Magnificent Seven' Stocks Will Become the World's Largest Companies by 2030' was originally published by The Motley Fool.
