Metaplatform, Tesla, and Broadcom each have a market capitalization of about $1.6 trillion.
AI is the driving force behind all three stock prices.
One of these technology leaders is quickly realizing the benefits of its AI investments, making its stock valuation more attractive at this point.
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Artificial intelligence (AI) has created trillions of dollars in value for a small number of companies over the past few years. NvidiaFor example, thanks to its dominant position in the graphics processing unit (GPU) market, its market capitalization briefly reached $5 trillion this year. Four other companies are firmly above the $2 trillion threshold as we enter the new year.
However, as of this writing, the three AI stocks have similar market capitalizations of about $1.6 trillion, and are vying to become the first new $2 trillion companies in 2026. meta platform(NASDAQ:Meta), tesla(NASDAQ:TSLA)and broadcom(NASDAQ:AVGO). Here are my predictions for the next companies to break through this milestone: That could be as early as next year.
Image source: Getty Images.
Meta, Tesla, and Broadcom all see their stock prices heavily influenced by advances in AI this year.
Efforts to improve the recommendation algorithm have borne fruit, and Meta stock has rallied at the start of the year. As time spent on apps increased and advertising became more effective, advertising revenue also increased. However, the stock recently retreated as management shared plans to increase AI-related spending.
Tesla's value is largely tied to its robotaxi service and AI innovation. The company's stock price rose after it began testing robotaxis in Austin, Texas, over the summer. Investors fueled these gains on expectations for advances in the company's next-generation AI chips for vehicles.
Broadcom's custom AI accelerator business will gain momentum in 2025 as the company signs major deals with OpenAI and Anthropic. Anthropic is acquiring the latter. alphabetBroadcom designed Tensor Processing Unit (TPU). To this end, Alphabet and Broadcom are making great strides in moving more developer workloads to TPUs, which offer greater energy efficiency and cost savings compared to Nvidia's GPUs.
Broadcom stock took a step back after its last earnings report, as many analysts were disappointed with management's expectations for higher AI chip sales at lower gross margins.
All three of these stocks have a path to reaching $2 trillion in valuation in 2026, but I expect Meta Platforms to reach that milestone first. Here's why:
Despite reaching $200 billion in annual revenue, Meta is still growing its revenue rapidly. Adjusted earnings per share rose 20% in the third quarter due to improvements in AI.
Meta has seen both ad impressions and ad spend increase for eight consecutive quarters. This shows that they are increasing user engagement and opening up new places for ads within apps, while increasing the effectiveness of ads.
Management cited changes to the recommendation algorithm to make it more versatile across formats as a key reason why users are spending more time in the app. Meta achieved similar improvements by applying the same techniques to its advertising algorithms. In other words, larger models directly lead to increased profits.
This trend should continue in 2026 as Meta opens up even more advertising opportunities for places like Threads and WhatsApp. We may also start monetizing Meta AI, our generative AI chatbot. Algorithm improvements over the past few years should allow you to scale your advertising quickly without the negative impact on pricing that we've seen in the past.
But the bigger opportunity for Meta in 2026 may be expanding its generative AI capabilities. The company is reportedly working on an AI agent that can manage advertising campaigns for small and medium-sized businesses. CEO Mark Zuckerberg has repeatedly talked about the opportunity to have everything involved in creating, testing and optimizing ad campaigns on the platform handled through AI agents.
And chatbots focused on corporate sales and customer service could open the door for more companies to start messaging Facebook and Instagram users through Meta's chat app.
With small businesses making up the majority of advertisers on Meta's platform, these innovations have the potential to dramatically increase the amount advertisers spend on advertising. If these clients have much lower overhead costs, they can increase their advertising spend and grow their business faster.
These efforts should drive strong revenue growth for another year. Additionally, Meta should be able to manage continued improvement in earnings per share with the help of share buybacks, although depreciation and amortization costs due to increased AI-related capital spending may weigh on earnings growth.
The stock trades at just 26 times forward earnings, which is far lower than Broadcom's multiple and less than a tenth of Tesla's stock multiple. By 2026, I expect Meta's earnings multiple to be even higher as its AI investments prove to be well worth it, reaching a valuation of $2 trillion.
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Adam Levy holds positions at Alphabet and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
The article “Prediction: This AI stock could become the first $2 trillion startup in 2026” was published by The Motley Fool.
