Key Points in This Article:
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Apple’s (AAPL) growth has stagnated, with revenue and EPS trailing the S&P 500 over the past few years, driven by iPhone saturation and regulatory pressures.
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That opens the door for one dark horse candidate in particular to surpass Apple’s valuation within the next five years.
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Apple’s Fading Dominance
Apple (NASDAQ:AAPL), once the unrivaled leader of the late 2010s and early 2020s, was the first stock to achieve a $1 trillion market valuation, crossing the threshold in 2018.
Although AAPL’s market cap has tripled since then, 10 companies now have trillion-dollar valuations, and Apple has slipped to the third-largest company. It trails both Microsoft (NASDAQ:MSFT) at $3.7 trillion and Nvidia (NASDAQ:NVDA) at $3.78 trillion.
Yet Apple’s brand remains a global powerhouse. According to brand valuation consultancy Brand Finance, the tech giant remains the world’s most valuable brand worth $574.5 billion, an 11% increase from last year and 25% greater than No. 2 Microsoft. It is 37% more valuable than third place Google at $413 billion.
Yet Apple’s growth has stagnated, leaving it vulnerable to more dynamic competitors. That’s why I predict one surprising stock will overtake Apple by 2030. There are others that may also become more valuable, but considering just two years ago it was worth just $233 billion, this stock’s meteoric rise is more remarkable.
A Rising Star
In only two-and-a-half years, Broadcom (NASDAQ:AVGO) has increased its value 5.5x with a current market cap of $1.27 trillion, driven by its explosive growth in AI semiconductors and enterprise software. In contrast to Apple’s sluggish performance and overvalued stock, AVGO is on a path to become more valuable than Apple in just five years.
Its superior revenue, earnings, and stock price growth over the past three years position it to close the gap and achieve a higher market cap.
Apple’s Growth Stalls and Valuation Concerns
Apple’s financial performance has weakened, with revenue growth at a 1% compound annual growth rate (CAGR) from 2022 to 2024, constrained by iPhone market saturation, which accounts for 51% of its $391 billion in fiscal 2024 revenue.
Earnings growth, at a modest 2.6% CAGR, significantly trails the S&P 500’s 7% to 8% average. This slow growth reflects only incremental innovation in iPhone updates, with much of Apple’s earnings now carried by its services business, such as iCloud, Apple Music, and Apple Pay. Regulatory pressures, including EU antitrust probes into the App Store and U.S. lawsuits over ecosystem practices, further erode margins and growth prospects.
Despite this, Apple trades at a lofty 28 times forward earnings, compared to the S&P 500’s 22.8, suggesting overvaluation. If Apple’s price-to-earnings (P/E) multiple aligned with the market average, its market cap could fall to approximately $2.44 trillion, making it easier for a high-growth competitor like Broadcom to surpass it.
Broadcom’s AI and Software Surge
Broadcom’s meteoric rise is fueled by its leadership in AI-driven semiconductors and enterprise software, further bolstered by its $69 billion acquisition of VMware in 2023. Over the past three years, Broadcom’s revenue grew at a robust 15.8% CAGR, reaching $51.6 billion in 2024, compared to Apple’s anemic 0.5%. Wall Street forecasts AVGO will achieve revenue of $62.7 billion this year, up 21.6%, with an additional 20% gain next year.
Its adjusted earnings per share (EPS) soared at a 28.6% CAGR, driven by high-margin custom AI chips for hyperscalers like Google and Meta Platforms (NASDAQ:META), which account for 70% of the AI chip market.
Moreover, Broadcom’s stock price has delivered a staggering 74.2% CAGR, far outpacing Apple’s 13.5% rise, reflecting investor enthusiasm for its AI and networking solutions. Trading at a forward P/E of 33, Broadcom’s premium valuation is supported by its dominant position in data center infrastructure and software, with VMware contributing 20% of revenue. It seems to possess unstoppable AI momentum, reinforcing its growth narrative.
Why Broadcom Will Overtake Apple
Broadcom’s path to surpassing Apple hinges on its ability to sustain its high-growth trajectory in two of the most transformative tech sectors: AI semiconductors and enterprise software. The global AI chip market, projected to grow at 30% annually through 2030, aligns with Broadcom’s strengths, as its custom chips power data centers for Amazon (NASDAQ:AMZN) and Microsoft.
VMware’s software solutions, including virtualization and cloud management, cater to enterprises shifting to hybrid cloud environments, adding another resilient revenue stream. Broadcom’s $12.4 billion in free cash flow so far this year supports aggressive R&D, acquisitions, and share buybacks, driving further valuation expansion.
In contrast, Apple’s reliance on consumer hardware leaves it exposed to cyclical demand and regulatory risks, with no major product breakthroughs since the Apple Watch a decade ago (the Vision Pro virtual reality headset launch last year was generally considered a flop). Its services segment, while growing, faces competition from Spotify (NASDAQ:SPOT) (Apple Music) and Netflix (NASDAQ:NFLX) (Apple TV), capping its potential upside.
Alphabet’s (NASDAQ:GOOG)(NASDAQ:GOOGL) ad-driven model, by comparison, is cyclical, but Broadcom’s enterprise focus insulates it from consumer spending fluctuations, as evidenced by Apple’s weak first-quarter consumer data. If Broadcom maintains its revenue and earnings momentum, it could close the $1.73 trillion gap to Apple by 2030, especially if Apple’s valuation contracts to a more reasonable 20 P/E due to its growth challenges.
Broadcom’s diversified, high-margin businesses and alignment with secular AI and cloud trends position it to overtake Apple’s market cap, redefining tech leadership in the coming years.
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The post The Surprising Stock That Will Be Worth More Than Apple by 2030 appeared first on 24/7 Wall St..
