Alphabet Inc.

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Alphabet Inc. stock analysis GOOGL overview
Bullish +75

2 Stocks That Will Be Worth More Than Apple by 2028

📉 Alphabet and Microsoft have surpassed Apple in growth speed and net income over the recent past.

⚠️ Apple is perceived as lagging behind competitors in artificial intelligence innovation and product launches.

📅 2026 is identified as a critical year where Apple must maintain mid-teens revenue growth to counter predictions of being replaced by rivals.

💵 Alphabet's valuation appears inflated at a P/E ratio of 33 despite recent strong earnings compared to peers.

☁️ Cloud computing segments for Microsoft Azure (39% growth) and Google Cloud (48% growth) are driving superior performance over Apple.

🤖 Both competitors have stronger exposure to the AI build-out, which is expected to fuel continued rapid revenue expansion.

💰 The net income gap in favor of Microsoft and Alphabet has already widened due to their larger revenues compared to Apple.

⚠️ Stock Advisor recently excluded Alphabet from its top 10 stock list, citing strong historical returns for other picks.

🔮 The article concludes that Microsoft and Alphabet will permanently surpass Apple by 2028 due to growth rates and AI technology.

📊 Historical examples from Netflix and Nvidia demonstrate the potential for significant long-term returns on Stock Advisor's top picks.

Bullish Signals
  • Microsoft Azure revenue grew an impressive 39% year over year, while Google Cloud saw an astounding 48% increase during the last quarter.
  • Both Microsoft and Alphabet are generating higher net income than Apple, with a widening gap expected as their growth rates accelerate.
  • Alphabet's revenue rose 18% and Microsoft's increased by 17% in their most recent quarter, demonstrating stronger tailwinds favoring both companies.
  • Microsoft and Alphabet possess superior generative AI technology that will allow them to permanently surpass Apple by 2028.
  • The Motley Fool Stock Advisor has historically generated a total average return of 952%, significantly outperforming the S&P 500's 191% return.
  • Alphabet and Microsoft are highly exposed to the AI build-out, positioning them to see continued rapid revenue growth over the next few years.
Risk Factors
  • Alphabet was not included in the Motley Fool Stock Advisor's top 10 best stocks list for investors to buy now, despite its bullish outlook elsewhere.
  • Apple trades at a price-to-earnings ratio of 33, which is described as rather high given that it has only recently started posting good results again compared to Microsoft and Alphabet.
  • Apple is perceived as being way behind in the artificial intelligence (AI) arms race and hasn't launched a game-changing product in multiple years.
  • Apple relies on hard-earned market share that may not last as competitors offer more advanced AI features.
  • If Apple returns to its usual mid-single-digit growth rate instead of sustaining mid-teens growth, the investment thesis for Alphabet surpassing it remains applicable.
  • The article notes that until Apple starts launching innovative products and offering a respectable AI offering, Alphabet and Microsoft are viewed as more promising investments, suggesting a risk to Apple's future competitiveness.
Full Analysis
The Motley Fool analyst Keithen Drury argues that both Alphabet (GOOGL) and Microsoft (MSFT) will become larger than Apple (AAPL) by 2028, citing superior growth rates and stronger tailwinds in cloud computing and artificial intelligence. While Apple recently reclaimed its position as the world's second-largest company behind Nvidia, Drury believes it has fallen behind competitors in the AI arms race and lacks a consistent history of innovation compared to Alphabet and Microsoft. The analyst notes that Apple's revenue growth has been lackluster outside of its most recent quarter, trading at a price-to-earnings ratio of 33, which is higher than the valuations for both Microsoft and Alphabet despite them generating higher net income. A key driver for this outlook is performance in cloud computing, where Google Cloud reported an astounding 48% year-over-year revenue increase and Azure saw a 39% rise during their last quarter. These companies are heavily exposed to AI infrastructure spending, which Drury expects will fuel rapid growth and widen the gap with Apple, whose growth is projected to revert to mid-single digits unless it can sustain its recent mid-teens performance. The analyst concludes that Alphabet and Microsoft possess superior generative AI technology and growth trajectories that will allow them to permanently surpass Apple in market size within six years. The article also highlights that while Alphabet isn't included in the Motley Fool Stock Advisor's current top 10 picks, historical examples like Netflix and Nvidia show how early investments can yield massive returns. Drury discloses positions in Alphabet, Microsoft, and Nvidia, and notes that The Motley Fool itself holds recommendations for all four companies mentioned (Apple, MSFT, GOOGL, NVDA) while being short on Apple stock.