Nvidia may have become the world’s first $4 trillion company, but it might not hold the crown for long. According to analysts at Oppenheimer, Microsoft is hot on its heels and could soon reach $4.5 trillion market cap, making it a top contender in the AI race and possibly be a more attractive stock right now.
Microsoft AI Market Cap Prediction
Oppenheimer analysts have placed a $600 price target on Microsoft (NASDAQ: MSFT), reflecting a 19% upside from current levels. That would push its valuation past $4.5 trillion, outpacing Nvidia’s recent market cap. The driver behind this projection? Microsoft’s accelerating AI momentum, particularly in cloud computing and its close partnership with OpenAI.
Azure, Microsoft’s cloud platform, has emerged as a powerful engine for growth. And it’s not just a data infrastructure provider. It’s becoming the default AI development environment for many enterprise customers.
Demand has surged to the point that even with tens of billions of dollars in capital expenditures, largely focused on AI data centers, Microsoft says supply still can’t meet demand.
While Nvidia’s GPUs remain the gold standard for AI training, Microsoft’s AI strategy spans further. With a foothold in foundational software, enterprise productivity, and AI hardware through Maia chips, Microsoft’s diversification makes it a resilient force in the sector.
Nvidia’s Position is Still Strong
Nvidia (NASDAQ: NVDA) has soared more than 10x over the past three years, thanks to explosive growth in AI infrastructure spending. Its graphics processing units (GPUs) are the backbone of generative AI model training, and its proprietary CUDA software gives it a near-monopoly edge.
Still, challenges are emerging. Hyperscalers like Meta and Microsoft are developing their own AI chips, aiming to reduce reliance on Nvidia. Meta’s upcoming chips will power its Llama foundation model, and while Microsoft has delayed the next generation of its Maia chips to 2026, internal silicon efforts across the tech giants are intensifying.
Nvidia also faced pressure from U.S. export restrictions, particularly regarding its H20 chips in China. While those restrictions are predicted to be reversed—prompting a rebound in earnings expectations—the company still trades at a lofty valuation of nearly 40x forward earnings. That premium, along with growing customer independence, may constrain Nvidia’s upside in the long run.
The Two AI Giants
Both companies have forward-looking projections that point to trillions in value. Nvidia is expected to reach $4.9 trillion, according to updated Oppenheimer estimates, while Microsoft’s target sits at $4.5 trillion. The distinction lies not just in the numbers but in the risk profile and market diversification.
Microsoft’s AI leadership doesn’t rest solely on hardware. Its dominance in enterprise software, strategic alignment with OpenAI, and strength in cloud infrastructure give it a multi-pronged advantage. It also trades at a more modest (though still elevated) 33x forward earnings—a multiple that investors may find more palatable given the company’s breadth and durability.
For investors betting on the next phase of the AI revolution, Microsoft’s steady climb and diversified exposure may prove to be an attractive long-term play.
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