As of December 31, Apple held a market value of $3. 7 trillion, maintaining its status as the most valuable U. S. company for much of the past decade. However, Apple has not yet demonstrated its capability to monetize artificial intelligence to the extent that other major tech companies have. Consequently, Wall Street anticipates that Apple’s stock will remain relatively stable over the next year. The median 12-month target of $250 per share suggests a slight decline from its current price of $251. This situation provides Amazon (NASDAQ: AMZN) and Nvidia (NASDAQ: NVDA) a chance to surpass Apple’s current valuation. Amazon currently holds a market value of $2. 3 trillion. To achieve a $3. 8 trillion valuation, its stock price would need to rise to $362 per share, representing about a 65% increase from its value on December 31. Nvidia, with a market value of $3. 3 trillion, would require its stock price to reach $156 per share, an increase of approximately 16%, to attain a $3. 8 trillion valuation. Although the prediction for Amazon is notably more ambitious than that for Nvidia, both scenarios are conceivable this year.

Here's why: 1. **Amazon** Amazon delivered remarkable financial performance in the third quarter, with revenues climbing 11% to $159 billion, notably driven by strong growth in advertising and cloud computing. The operating margin improved by over 3 percentage points due to enhanced fulfillment efficiency, while GAAP earnings soared 52% to $1. 43 per diluted share. Looking forward, Amazon's investment thesis includes three key elements: it operates the largest e-commerce marketplace in North America and Western Europe, it ranks as the third-largest ad tech firm globally, and Amazon Web Services stands as the largest public cloud provider. The latter is crucial, as it positions Amazon to benefit from the increased demand for artificial intelligence, drawing more businesses to the cloud. Wall Street projects a 26% growth in Amazon's earnings over the next 12 months, justifying its current valuation at 47 times earnings. This results in a price/earnings-to-growth (PEG) ratio of 1. 9, significantly lower than Apple’s PEG ratio of 3. 6. If Amazon slightly exceeds earnings predictions, its valuation multiple could grow to a point where its market value hits $3. 8 trillion.