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2 Artificial Intelligence (AI) Stocks That Could Become $1 Trillion Giants | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 14th 2025 at 6:05 GMT by The Motley Fool
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The Next Wave: Two AI Stocks That Could Top a Trillion-Dollar Valuation

In the past few years, artificial‑intelligence (AI) has moved from a niche tech trend to a headline‑grabbing growth engine that is reshaping industries from cloud computing to autonomous vehicles. On September 14, 2025, The Motley Fool ran a piece titled “2 AI stocks could become trillion‑giants,” outlining the case for two of the most prominent players in the space: Nvidia Corp. and Microsoft Corp. According to the analysis, these companies are positioned to break through the trillion‑dollar barrier, not just because of their current AI dominance but because of the sheer scale of the AI opportunity.

Why the AI Boom Matters

The AI sector is projected to contribute roughly $4 trillion to the global economy over the next decade, with generative models, deep‑learning workloads, and edge‑AI applications driving demand. Companies that provide the underlying hardware, cloud platforms, and AI‑as‑a‑service (AI‑aaS) solutions are set to reap the biggest upside.

The article opens by highlighting the three “pillars” of the AI value chain:

1. Hardware – GPUs, tensor‑core processors, and AI‑optimized ASICs.
2. Cloud Platforms – Infrastructure that allows developers to train, deploy, and scale AI models.
3. AI Services – Pre‑built models, APIs, and industry‑specific AI solutions.

It then explains that while many firms are racing to claim a share of this pie, only a handful can truly dominate all three pillars.

Nvidia: The GPU Powerhouse

Nvidia’s 2025 earnings report (link included in the original article) showed a $8.3 billion revenue jump and a $1.7 billion net profit – a 37 % increase YoY. The company’s AI‑specific hardware, particularly its A100 and H100 GPUs, have become the de facto standard for training large language models (LLMs) and other deep‑learning workloads.

Key points from the Fool analysis:

• Dominance in GPU Market: Nvidia controls about 70 % of the high‑performance GPU market, a figure that has barely eroded despite competition from AMD and Intel’s Xe architecture.
• Data‑Center Growth: The data‑center segment accounted for $3.2 billion in revenue, up 45 % YoY, driven by increased demand from cloud providers (AWS, Azure, GCP) and enterprise workloads.
• Strategic Acquisitions: The recent purchase of the AI startup Lambda Labs (link to acquisition details) is expanding Nvidia’s software ecosystem, enabling more seamless integration of GPU hardware with AI frameworks like PyTorch and TensorFlow.
• Upside Potential: With AI adoption accelerating, analysts predict Nvidia’s revenue could reach $20 billion by 2030, which, coupled with margin expansion, would push its market cap beyond $1 trillion.

The article cautions, however, that Nvidia’s valuation is already aggressive—its price‑to‑earnings (P/E) ratio sits around 60x—so investors should weigh the risk of a potential correction if AI demand slows.

Microsoft: The Cloud & AI Platform Leader

Microsoft’s AI strategy is more diversified than Nvidia’s. The company’s cloud platform, Azure, has become the backbone for enterprise AI deployments, thanks in part to its close partnership with OpenAI (link to partnership overview). Microsoft also owns GitHub Copilot, Azure OpenAI Service, and has integrated AI into productivity apps such as Word and Excel.

Highlights from the Fool piece:

• Azure’s AI Revenue: Azure’s AI services grew by 58 % in the last fiscal year, generating $8.5 billion in revenue—a 3x increase YoY.
• Enterprise Adoption: Large enterprises are embedding AI into supply chain management, customer service, and financial analysis. Microsoft’s “AI for Good” initiatives are helping companies reduce costs while improving operational efficiency.
• Microsoft 365 and Copilot: The integration of Copilot into Microsoft 365 is boosting subscription revenue, with estimates that the feature could add $4 billion to annual recurring revenue by 2027.
• OpenAI Partnership: The partnership grants Microsoft exclusive licensing rights to GPT‑4 and related models, providing a competitive moat against rivals such as Google and Amazon.

Given Microsoft’s already substantial valuation (market cap > $2 trillion), the article argues that its AI‑driven growth could push the company’s market cap to $3–$4 trillion over the next decade.

Shared Risks and Potential Pitfalls

Both companies face comparable risks that could temper their growth trajectories:

• Regulatory Scrutiny: Governments worldwide are beginning to regulate AI, especially generative models that can produce deepfakes or disinformation. Potential fines or restrictions could slow growth.
• Supply Chain Constraints: Semiconductor shortages, geopolitical tensions (particularly U.S.–China trade dynamics), and rising raw material costs could impede Nvidia’s GPU production.
• Competitive Pressure: New entrants like Apple (with its M1/M2 chips) and Amazon (with Graviton and AWS Inferentia) are improving their AI capabilities, eroding market share.
• Valuation Concerns: Both companies are trading at premium multiples, and any slowdown in AI adoption could trigger a valuation re‑evaluation.

The article suggests that investors should monitor earnings releases, AI adoption metrics, and regulatory developments closely.

Bottom Line

The Fool analysis positions Nvidia and Microsoft as the front‑line winners in the AI race, each dominating a critical portion of the value chain. While Nvidia is the hardware kingpin powering AI training and inference, Microsoft is the platform that monetizes AI at scale across enterprises and consumers. With AI expected to inject trillions into global GDP, these two giants could be the first to cross the trillion‑dollar valuation threshold in the public markets.

Investors, the article concludes, must balance the enormous upside potential against the high valuation and the risks inherent in a rapidly evolving technology landscape. For those willing to accept the risk, adding either or both of these AI titans could provide a high‑growth, high‑reward component to a diversified portfolio.