Nvidia Shares are up more than 170% year-to-date on artificial intelligence (AI) enthusiasm. The chipmaker now has a market capitalization of $3.3 trillion, making it the second most valuable public company in the world after Apple.

But I believe Meta platforms (META -1.14%) and Alphabet (GOOGL -1.20%) (GOOG -1.14%) may exceed $3.3 trillion in the next three or four years. Here’s why:

• Meta is currently worth $1.4 trillion, but its market value could grow by 140% to reach $3.4 trillion by 2028. This forecast implies annual returns of 25% over the next four years.
• Alphabet is currently worth $2 trillion, but its market value could grow 70% to reach $3.4 trillion by 2027. That forecast implies annual returns of 19% over the next three years.

Here’s what investors should know about these AI stocks.

Meta Platforms could exceed $3.3 trillion market value by 2028

Meta Platforms owns four of the seven most popular social networks in Facebook, Instagram, WhatsApp and Messenger. Nearly 3.3 billion people interact with at least one of these platforms every day, and each interaction creates data that can inform ad campaigns. These qualities made Meta the second largest adtech company in the world.

Meta will account for 21.9 percent of digital ad sales this year, up four-tenths of a percentage point from last year, according to eMarketer. And it could continue to gain share as it leans toward artificial intelligence (AI). Its conversational assistant Meta AI has already attracted more than 500 million monthly users since its launch in April, and its AI-powered recommendations have increased time spent on Facebook and Instagram by 8% and 6%, respectively, year-to-date.

Additionally, over 1 million advertisers have used Meta Generative AI tools to create marketing content last month. CEO Mark Zuckerberg estimates that these tools have increased conversions by 7% and believes the company can achieve more productivity gains for advertisers in the future. This could certainly lead to market share gains.

Either way, Meta has a good shot at annual revenue growth in the teens by the end of the decade. I say this because the adtech software market is projected to grow 22% annually through 2030, and digital ad spending is expected to grow 15% annually. Meta should be able to split the difference, and the company also has opportunities beyond digital advertising.

Most importantly, Meta has a nascent but potentially large opportunity augmented reality (AR). The company recently introduced Orion, its first pair of fully holographic AR glasses. Zuckerberg says, “We’re not too far from being able to offer great glasses that allow you to seamlessly merge the physical and digital worlds.” Grand View Research predicts that the AR market will grow by 38% annually until 2030.

With that in mind, Wall Street expects Meta’s earnings to grow 21% annually over the next three years. That makes its current valuation of 26.7 times earnings look reasonable, especially when the two-year average is 26.9 times earnings. But Meta regularly beats estimates.

So let’s say earnings grow 25% annually for the next four years. In this scenario, Meta’s market cap would exceed $3.3 trillion by 2028 without any change in its price-to-earnings ratio.

Alphabet may surpass $3.3 trillion in market value by 2027

Alphabet subsidiary Google is the world’s largest digital advertising company. It will account for 27.4% of digital ad spending this year, down six-tenths of a percentage point from last year, according to eMarketer.

But the losses in market share are limited to the open Internet. The company is turning to AI to maintain its dominance in search and video advertising through Google Search and YouTube, respectively.

To elaborate, Alphabet recently introduced a generative AI overview to Google Search, and CEO Sundar Pichai says user engagement and satisfaction are trending higher. The company also uses its Gemini model to show relevant content to YouTube users. This has helped YouTube maintain its status as the most popular streaming service in the US as measured by watch time. In addition, Alphabet will debut a video generation model called Veo to help YouTube creators later this year.

Beyond advertising, Google is the third largest public cloud, but is gaining ground. The company accounted for 13% of spending on cloud infrastructure and platform services in the third quarter, up two percentage points from a year earlier. Strength in artificial intelligence factored significantly into these stock gains. Forrester Research recently recognized Google as a leader in AI and core infrastructure solutions large language patterns.

Beyond its core business, Alphabet has an opportunity autonomous driving Waymo subsidiary. While Waymo is unlikely to be a material source of revenue until 2027, it already commands global market value today based on future potential. Bloomberg recently reported that Waymo was valued at more than $45 billion in its most recent funding round, and further advances — such as the planned launch of the self-driving ride-sharing service in Austin and Atlanta next year — could increase the global market value of Alphabet in the coming years.

Wall Street expects the company’s earnings to grow 16.7% annually over the next three years. That makes the current valuation of 22.7 times earnings look reasonable. But share gains in cloud computing could lead to faster growth, with public cloud spending projected to grow 21 percent annually through 2030.

So let’s say Alphabet’s earnings grow at 19% annually over the next three years. In this scenario, the company’s market value would exceed $3.3 trillion by 2027 without any change in its price-to-earnings ratio.