Prediction: 2 AI Stocks Will Be Worth More Than Nvidia and Palantir Technologies Combined by 2028 | The Motley Fool

Nvidia is the world’s most valuable company, with a market capitalization of $4.5 trillion. Meanwhile, Palantir Technologies is worth $400 billion. That brings their collective valuations to $4.9 trillion. I think Amazon (AMZN 0.31%) and Alphabet (GOOGL +1.60%) (GOOG +1.57%) can top that figure by 2028. Here’s what that implies for shareholders:

• Amazon is worth $2.6 trillion. The stock must add about 92% for the company’s market value to hit $5 trillion. Reaching that level by the end of 2028 implies annual returns of 24% over the next three years.
• Alphabet is worth $3.9 trillion. The stock must add about 28% for the company’s market value to hit $5 trillion. Reaching that level by the end of 2028 implies annual returns of 9% over the next three years.

Here’s what investors should know about Amazon and Alphabet.

1. Amazon

Amazon is deploying artificial intelligence (AI) products and tools across its three core businesses — retail e-commerce, digital advertising, and cloud computing — to not only increase revenue, but also to improve profitability. Non-GAAP operating margin increased nearly 2 percentage points in the past year due in part to efficiency gains in the retail business driven by generative AI tools.

Amazon Web Services (AWS) dominates the cloud infrastructure and platform services market with 41% market share, according to Gartner. Cloud computing revenue…