Group 1: Nvidia - Nvidia shares have advanced 18% year to date, with a market value potentially reaching $5 trillion by the end of 2026 [1][7] - The company dominates the AI accelerator market, accounting for about 90% of sales, and is also a leader in networking gear for generative AI workloads [4][5] - Nvidia's first-quarter revenue rose 69% to $44 billion, driven by AI infrastructure demand, with non-GAAP net income increasing 33% to $0.81 per diluted share [6] - Analysts project Nvidia's adjusted earnings to grow at 41% annually through January 2027, making its current valuation of 50 times adjusted earnings reasonable [8] Group 2: Microsoft - Microsoft shares have also advanced 18% year to date, with a potential market value of $5 trillion within 18 months [1][7] - The company generates significant revenue from enterprise software and cloud computing, with a strong position in various software verticals and the second-largest public cloud [9] - Microsoft reported a 13% revenue increase to $70 billion in the third quarter of fiscal 2025, with strong momentum in Azure and a threefold increase in Microsoft 365 Copilot users [11] - Wall Street estimates Microsoft's earnings will grow at 13% annually through June 2026, although the current valuation of 38 times earnings may be considered expensive [12][13]
2 Artificial Intelligence (AI) Stocks to Buy Before They Soar to $5 Trillion, According to Select Wall Street Analysts