The exclusive trillion-dollar club currently has five American members — Apple (NASDAQ: AAPL) at around $3 trillion market capitalization, Microsoft at about $2.8 trillion, Google parent Alphabet (NASDAQ: GOOG) at nearly $1.8 trillion, Amazon (NASDAQ: AMZN) at $1.6 trillion, and Nvidia (NASDAQ: NVDA) at $1.2 trillion market cap (values as of Dec. 27, 2023). Barring strong market declines or the stocks losing significant value, these five seem poised to likely remain in the club. The question, of course, is which companies will join them next.
One easy answer is the two companies that, together with the current five trillion-dollar companies, make up the Magnificent Seven tech stocks — Meta Platforms (NASDAQ: META) and Tesla (NASDAQ: TSLA). No big surprise there as tech giants have dominated the market in 2023 with the Magnificent Seven jumping 75% to now make up 30% of the S&P 500. Both Meta and Tesla are on the verge of the $1 trillion valuation … again … as they both, in fact, crossed the trillion dollar mark previously but their share prices have dropped since. (Also see, from September, Most of S&P 500’s Gains Driven by 7 Firms, Others Up Less than 5% YTD.)
Meta Platforms
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Though Meta (NASDAQ: META) shares remain below their 2021 high, the stock nearly tripled this year, and now Meta has a market cap of nearly $920 billion and is the closest to rejoining the club. The social networking behemoth is one of Wall Street’s favorites, according to Bloomberg, with strong bullish sentiments among investors. Considering Meta’s share price needs to rise about 9%, Meta might resume club membership already in 2024.
Tesla
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Tesla (NASDAQ: TSLA) had a somewhat choppier year, at least compared to its “magnificent” peers. Though electric car company’s share price actually more than doubled in 2023, it remains far from its 2021 high. Unlike Meta, there are more concerns about the company’s deliveries, profits, and other issues. Tesla is also trading at about 75 times forward earnings — by far the highest multiple of the seven. Still, the EV darling currently sits at a near $820 billion market cap and it may not take much for it to rejoin the club. Can it do it in the next two years?
Next on the list
If we simply look at the stocks that are next on the list of companies by market cap, four other potential candidates to join the trillion-dollar club pop up — Berkshire Hathaway, Eli Lilly, TSMC, and Visa.
Berkshire Hathaway
Source: Wikimedia Commons
The case for Berkshire Hathaway (NYSE: BRK-A) may be the most straight forward as the current market cap is already just over $777 billion. With the company still in the hands of Warren Buffet, the stock has to gain about 28% in valuation to join the club. In the past five years, Berkshire stock grew 76%. Despite being closer to the $1 trillion mark than others, Berkshire may not reach the threshold that soon. A longer-term horizon, fitting the Oracle of Omaha’s value-driven, buy and hold investing strategy, of about five years may be more probable.
Eli Lilly
Eli Lilly (NYSE: LLY), with a $552 billion market cap, needs to pretty much double to get to trillion dollars — can it? Well, in 2024, Lilly’s fate will likely be determined by its recently approved weight loss drug Zepbound, the continued success of its other diabetes and weight loss drug Mounjaro, and the success and introduction of other products, including a potential Alzheimer’s treatment. The stock was up 60% in 2023 riding the weight loss drug boom, and now it trades at nearly 50 times forward earnings, so it could be challenging. On the other hand, looking at the past five years, Lilly stock soared 400%.
Visa
Source: Justin Sullivan / Getty Images
Visa (NYSE: V) currently has above a $500 billion market cap, and there is a case for it to make it to $1 trillion. Investors, in general, like Visa’s strong financial position, which could enable it to make acquisitions to provide long-term growth, according to Zacks. Still, Visa could face increased competition if the Credit Card Competition Act passes. Eventually, it will be the company’s ability to meet increased digitization needs with different financial products that would determine whether it becomes a trillion dollar stock over the next five years … or not.
Taiwan Semiconductor Manufacturing
Source: MF3d / Getty Images
The founder of TSMC (NYSE: TSM), the world’s largest chip maker, expects China-U.S. tensions to slow the chip industry, Reuters reported. On the plus side, however, the company is investing in a plant in Arizona that Nvidia CEO called a game-changer for the industry. Considering it is hovering around $500 billion market cap and that trillion-dollar company Nvidia outsources to TSMC, the latter could join the former in the exclusive club in a few years — assuming demand for chips is strong.
Riding the AI Wave
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Since the current trillion-dollar companies are all tech giants, it can be argued that the next evolutionary step in tech — artificial intelligence — would produce the next trillion-dollar companies. Of course, Alphabet, Nvidia, Microsoft, and others mentioned have AI angles, but are there any other companies in the field that could, within 10 to 15 years perhaps, reach the trillion-dollar mark?
One name that keeps popping up is that of cybersecurity company CrowdStrike Holding (NASDAQ: CRWD), which uses machine learning in its products to enhance protection for clients. The company’s current market cap is just over $60 billion, so this is a long-shot name. However, in its recent quarter, the company’s revenue jumped 35% year over year, and the stock price skyrocketed nearly 150% in 2023. Since going public in mid-2019, the stock soared 300%. Currently, 36 analysts have a buy recommendation on the stock and none has a sell recommendation.
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