Alphabet is a towering behemoth in the corporate world, boasting a jaw-dropping market cap of $2 trillion, which puts it in a league with just a handful of other colossal companies. Nevertheless, the horizon hints at the emergence of contenders that could overshadow Alphabet’s presence within the next five years. Enter Meta Platforms (NASDAQ: META) and Amazon (NASDAQ: AMZN).
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Exploring the Ascension of Meta Platforms
Meta Platforms currently stands at a market cap of about $1.5 trillion, trailing Alphabet by a little over $500 billion. Despite being only 75% of Alphabet’s size, Meta Platforms could potentially outshine its rival in the near future. The company’s magnitude is staggering, catering to nearly 3.3 billion daily active users across its platforms, including Facebook and Instagram, constituting over a third of the global populace engaged on Meta’s platforms daily.
Meta’s revenue from advertising is exceedingly substantial, raking in $38.3 billion in ad revenue in its latest reported quarter, translating to approximately $425 million per day. Although Alphabet currently surpasses this figure in ad revenue, it is grappling with challenges in its core internet search domain, not to mention the recent federal antitrust ruling branding the company a monopoly.
Meta’s forte lies in advertising revenue, a highly lucrative realm – indicated by its robust 38% operating margin. Despite its size, the company witnessed a remarkable 22% revenue growth in its most recent quarter, signifying its potential to catch up with Alphabet by 2029 or even earlier.
The Amazon Expedition: Journey Towards Dominance
If Meta has some ground to cover to surpass Alphabet, Amazon faces a mere crevice. With a market cap of $1.9 trillion, Amazon trails Alphabet by a modest $100 billion, approximately 5%. Over the past decade, these two juggernauts have exchanged positions multiple times, with Alphabet leading from 2014 to 2018. Subsequently, Amazon pulled ahead from 2018 to 2022, only to witness Alphabet reclaiming the top spot in recent years.
However, Amazon appears poised not only to reclaim its position but to surge ahead significantly of Alphabet over the next five years. The catalyst for this projected leap is Amazon’s recent strides under Chief Executive Officer Andy Jassy, who assumed office from Jeff Bezos in 2021.
After three years at the helm, Jassy is leaving an indelible mark on Amazon, fostering enhanced efficiency within the company. Amazon’s operating margin soared to almost 10% in its latest reported quarter, a substantial surge from its recent low of 1.8% recorded about a year after Jassy succeeded Bezos.