By Harsh Chauhan
Publication Date: 2025-12-20 17:30:00
This tech giant’s early entry into the AI space has helped it build a substantial revenue backlog that could propel its shares higher in 2026.
Nvidia (NVDA +3.80%) briefly became the first company to cross a $5 trillion market cap just a couple of months ago, driven by the company’s remarkable revenue and earnings growth on account of its dominance of the artificial intelligence (AI) chip market.
However, the share price of the chip giant has pulled back since then, even though it continues to maintain terrific growth despite its massive size. Concerns about the AI boom becoming a bubble and the sustainability of the heavy infrastructure spending that has driven Nvidia’s phenomenal growth over the past three years have begun to weigh on the stock.
But there’s another company — Microsoft (MSFT +0.22%) — that’s making the most of the proliferation of AI. One analyst believes that this “Magnificent Seven” company could hit a $5 trillion market cap in 2026. Let’s take a closer look at Microsoft’s prospects and why it could hit the $5 trillion market cap milestone in the new year.
Image source: Getty Images.
AI is set to accelerate Microsoft’s growth
There is no denying that Nvidia’s chips have played a crucial role in the widespread adoption of AI technology. However, the computing power provided by its chips is eventually harnessed to create customer-facing solutions. For example, training OpenAI’s ChatGPT wouldn’t have been possible without Nvidia’s chips, but the…