Nvidia has experienced tremendous growth in recent years, becoming a trillion-dollar stock and joining the ranks of tech giants like Microsoft, Apple, and Amazon. This raises the question: which companies are poised to follow suit and become trillion-dollar stocks?
Below is a list of potential trillion-dollar stocks, taking into account market capitalization and growth rate to project when they may reach the coveted milestone:
Which Companies Could Become Trillion-Dollar Stocks?
The following companies have the potential to surpass a market capitalization of $1 trillion based on their current market cap and growth rate:
- Market capitalization: Companies closer to the trillion-dollar mark require less growth to reach it.
- Growth rate: Faster-growing companies will reach the trillion-dollar threshold sooner.
This list considers each company’s three-year historical growth rate and extrapolates that to estimate the time until they reach $1 trillion. This approach allows fast-growing companies further from the $1 trillion mark to be included in the list.
| Company (symbol) | Market cap | Stock growth (3-year average growth) | Time until $1 trillion |
|---|---|---|---|
| Source: Google Finance, as of July 2, 2024 | |||
| Berkshire Hathaway (BRK-B) | $876 billion | 13% | 1 year and 1 month |
| Eli Lilly (LLY) | $862 billion | 57% | 4 months |
| Broadcom (AVGO) | $772 billion | 52% | 7 months |
| JPMorgan Chase (JPM) | $596 billion | 10% | 5 years, 4 months |
| Walmart (WMT) | $545 billion | 13% | 4 years, 8 months |
| Exxon Mobil (XOM) | $510 billion | 22% | 3 years, 4 months |
| Oracle (ORCL) | $395 billion | 21% | 4 years, 10 months |
| Costco Wholesale (COST) | $381 billion | 29% | 3 years, 8 months |
| Merck (MRK) | $324 billion | 18% | 6 years, 10 months |
| Advanced Micro Devices (AMD) | $262 billion | 20% | 7 years, 4 months |
For example, Berkshire Hathaway, with a market cap of $876 billion and 13% annual growth, is projected to reach $1 trillion in around 13 months. Conversely, Oracle, with lower market cap but faster growth, will take nearly five years to reach the milestone.
It’s important to note that these projections are based on the assumption that current growth rates will continue without significant disruption from market downturns or economic recessions.
The Potential of Trillion-Dollar Stocks
A company’s market cap reflects investor expectations and the strength of its business and financial resources. While a trillion-dollar market cap is a significant milestone, it doesn’t guarantee a stock will be a successful investment.
Investors should consider the following when evaluating trillion-dollar stocks:
- Stock performance: A high market cap indicates past success, but future performance is not guaranteed. Investors must conduct thorough research to assess a stock’s potential.
- Expectations: A large market cap signals high investor expectations for a company’s future performance. Whether these expectations are met remains to be seen.
- Financial strength: A high valuation suggests financial stability and the ability to raise capital through stock offerings.
While market cap provides insight into investor sentiment, it’s essential for investors to conduct their own analysis to determine if a stock is a sound investment. Those interested in large companies can consider investing in an S&P 500 index fund, which includes the stocks mentioned.
Alternatively, tech-focused investors may opt for a Nasdaq index fund to gain exposure to leading tech companies.
Regardless of your investment approach, partnering with a reputable online broker offering research, low fees, and excellent customer support is crucial.
Final Thoughts
A trillion-dollar market cap signifies investor confidence and strong performance, but it doesn’t guarantee a stock’s future success. Many top stocks continue to thrive long after achieving trillion-dollar status, providing opportunities for investors to benefit.
Editorial Disclaimer: It is advisable for all investors to conduct thorough research into investment strategies before making decisions. Past performance does not guarantee future price appreciation in investment products.