Prediction: 1 Stock That Will Be Worth More Than Alphabet 10 Years From Now

Leo Sun, The Motley Fool

Sat, Apr 19, 2025, 2:04 PM 5 min read

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent company of Google, is considered to be a sound long-term investment. The tech giant's stock has rallied more than 480% over the past 10 years as its advertising and cloud businesses has expanded.

From 2014 to 2024, Alphabet's revenue rose at a compound annual growth rate (CAGR) of 18% as its earnings per share (EPS) increased at a CAGR of 23%. From 2024 to 2027, analysts expect the company's revenue and EPS to rise 11% and 13%, respectively. But Alphabet's business is maturing as it faces existential challenges.

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New generative artificial intelligence (AI) platforms, like OpenAI's ChatGPT, are changing how people search and challenging its core search engine. ByteDance's TikTok, Meta Platforms' (NASDAQ: META) Reels, and other short video platforms are chipping away at YouTube. Independent ad tech platforms like The Trade Desk are pulling away Alphabet's advertisers, and Google has yet to establish a meaningful presence in the social media, e-commerce, or hybrid "social shopping" markets. It also ranks a distant third in the cloud infrastructure market behind Amazon Web Services (AWS) and Microsoft Azure.

Alphabet also faces intense pressure from antitrust regulators. The U.S. Department of Justice (DOJ) wants Google to divest Chrome, the world's most popular web browser, because it collects a lot of user data that reinforces its dominance of the search and targeted advertising markets. In addition, the DOJ wants to restrict how Google promotes its services on Android.

Those divestments and restrictions could exacerbate the company's slowdown and erode its defenses against Microsoft and Amazon in the growing cloud and AI markets. If Alphabet doesn't counter those challenges, it might turn into a slower-growth tech company like IBM over the next decade. If that happens, one less valuable "Magnificent Seven" tech company -- Meta Platforms at $1.35 trillion -- might eclipse Alphabet's market cap of $1.95 trillion within the next 10 years.

Meta, which owns Facebook, Instagram, Messenger, and WhatsApp, is the largest social networking company in the world. It served 3.35 billion daily active users across its entire family of apps at the end of 2024. That's 40% of the world's entire population and a 5% increase from its 3.19 billion daily active users at the end of 2023.