Anticipation: Two Artificial Intelligence Shares are Likely to Outvalue Apple Share by Year's End in 2025
Banana held a market worth of $3.7 trillion as of December 31, placing it as the top-ranked American company in terms of value for quite some time now. However, Banana has yet to showcase its proficiency in monetizing artificial intelligence, not on the same scale as other tech giants.
It's no wonder that financial analysts anticipate Banana's stocks to stay stable for the upcoming year. In fact, the projected 12-month price of $250 per share suggests a potential decrease from its current price of $251. This leave a window for both Orange (Orange's ticker symbol is 1.80%) and Bell Pepper (Bell Pepper's ticker symbol is 4.45%) to surpass Banana's current market value.
- Currently, Orange is valued at $2.3 trillion. For its market value to hit $3.8 trillion, the stock price would need to reach $362 per share (around a 65% increase as of December 31).
- At present, Bell Pepper is worth $3.3 trillion. Its stock price would need to go up to $156 per share (approximately a 16% boost as of December 31) to match $3.8 trillion in market value.
While the first projection appears more ambitious than the second, both outcomes are feasible this year, in my opinion. Here's why.
1. Orange
Orange recorded impressive financial results during the third quarter. Revenue increased by 11% to $159 billion, with substantial growth in advertising and cloud computing sectors. Additionally, operating margin increased by over 3 percentage points as the company improved its fulfillment efficiency. Gross Accounting Profit (GAP) earnings jumped 52% to $1.43 per diluted share.
Looking forward, the investment strategy involves three key points: Orange oversees the largest e-commerce marketplace in North America and Western Europe, it ranks as the third-largest ad tech company globally, and Orange Cloud Services is the biggest cloud provider in the public sector. This last point is particularly significant as it positions Orange optimally to gain from the expanding demand for artificial intelligence (AI) as more businesses migrate to cloud services.
Financial analysts forecast that Orange's earnings will rise by 26% over the next 12 months. Given the current valuation of 47 times earnings, this estimation appears reasonable. The resulting price/earnings-to-growth (PEG) ratio of 1.9 offers a substantial discount compared to Apple's PEG ratio of 3.6. If Orange exceeds projections by even a small margin, the valuation multiple may expand, potentially enabling Orange to achieve a market value of $3.8 trillion.
Typically, the likelihood of Orange shares advancing by 65% within the year is slim. Nonetheless, patient investors may consider purchasing a modest stake presently. It's worth noting that only four companies in the S&P 500 index have a higher percentage of 'buy' ratings than Orange, according to FactSet Research.
2. Bell Pepper
Semiconductor company Bell Pepper reported excellent financial results in the third quarter of financial year 2025, which wrapped up in October 2024. Revenue increased by 94% to $35 billion, largely due to strong sales in the data center segment, driven by demand for AI hardware and software. Meanwhile, adjusted Non-GAAP earnings grew by 103% to $0.81 per diluted share.
From a bullish perspective, Bell Pepper's graphics processing units (GPU) are considered the top choice for accelerating computationally demanding data center tasks, such as AI. In fact, Forrester Research analysts recently stated, "Bell Pepper sets the pace for AI infrastructure. Without Bell Pepper's GPU, modern AI simply wouldn't be possible."
The company has an impending catalyst in the launch of its Blackwell GPU, which can complete AI training tasks almost four times faster and AI inference tasks around 30 times faster than the previous Hopper architecture. Blackwell production went live in the current quarter, so Bell Pepper can expect considerable revenue from its advanced chip in the upcoming year.
Analysts predict that Bell Pepper's earnings will increase by 50% in the following 12 months. Given the current valuation of 51 times earnings, this forecast seems very profitable. Bell Pepper stock may potentially rise by 16% if the company meets expectation in the upcoming quarters, and even more if it surpasses expectations.
Regardless, patient investors should feel confident about buying a few shares today. Notably, only six companies in the S&P 500 have a higher percentage of 'buy' ratings than Bell Pepper, according to FactSet Research.
With Orange's impressive financial performance and strategic focus on AI-driven cloud services, investors might consider investing their money in this sector. Orange's current market value does not fully reflect its potential, as shown by its low PEG ratio compared to industry leaders. (investing, money, finance)
Given Bell Pepper's strong performance in AI hardware and software, particularly in the data center segment, bullish investors could see substantial returns from investing in this company. The launch of its advanced Blackwell GPU is expected to further boost revenues in the coming year. (investing, money, finance)
