7 Undervalued Stocks With Potential to Hit Trillion-Dollar Milestone

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  • Toyota (TM): Leveraging its established brand trust, Toyota stands out among undervalued stocks for potential resilience in the electric vehicle market.
  • Qualcomm (QCOM): With involvement in 5G and satellite platforms, Qualcomm presents an undervalued opportunity for growth.
  • IBM (IBM): Overlooked but forward-looking, IBM holds potential for long-term growth with its focus on artificial intelligence.
  • Read more about these top ideas for the next trillion-dollar companies.
the next trillion-dollar companies - 7 Undervalued Stocks With Potential to Hit Trillion-Dollar Milestone

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When discussing the next trillion-dollar companies, this article will either be prescient or a total clown show. And while there’s good evidence to suggest that I could sadly fall into the latter category, I’m not a complete buffoon. After all, though I clearly have my share of blunders, I also made the case for cryptocurrencies before their big breakout move.

Of course, with the topic being the next trillion-dollar companies, you’re going to need two things: the willingness to conduct extensive research and a grain of salt with which to take this article. At the end of the day, I’m some random voice on the Internet. So, you’ll want to consider all angles before forking over your hard-earned money.

That said, I have reasonable suspicions that, over a lengthy period of time, the below enterprises can hit the vaunted milestone. As of late September, Bankrate noted that there are five trillion-dollar companies publicly traded in U.S. exchanges. Unsurprisingly, they represent the usual suspects in the big technology space.

To add diversity, I’m going to be speculative. While Meta Platforms (NASDAQ:META) has a credible shot, I’ll look at less-obvious ideas for the next trillion-dollar companies.

Toyota (TM)

Toyota motor corporation logo on dealership building
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I’m going to start with what I believe to be the most credible idea (on this list) for the next trillion-dollar companies and that would be Japanese automotive giant Toyota (NYSE:TM). From the get-go, Toyota seems an odd choice because it was late to the electric-vehicle party. While Japanese institutions pride themselves in punctuality, in this case, fortune may favor the tardy.

With price wars, hot inflation, high borrowing costs and questionable economic dynamics converging against the EV sector, much pain has filtered throughout the value chain. Essentially, these headwinds translate to people holding onto their combustion-powered vehicles for as long as possible. Given that EVs remain higher priced compared to their combustion equivalents, Toyota stands on arguably favorable ground.

Even if the previously robust transition to electric mobility resumes, who’s to say that Toyota won’t eventually lead? Indeed, the Toyota brand generates considerable trust among consumers. With certain competitors arguably hurting from narcissistic leadership, TM could shine in the long run.

Qualcomm (QCOM)

Qualcomm (QCOM) logo on the side of a building in San Jose, CA.
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Although no one would question Qualcomm (NASDAQ:QCOM) as an integral part of the broader tech ecosystem, does it really belong in a list of the next trillion-dollar companies? It’s questionable. Yes, it gained about 12% since the January opener. However, the ride has been choppy. Also, with a market capitalization of $134 billion, it basically needs to be 10x before it can achieve the goal.

However, I don’t want to discount QCOM. First, Qualcomm is heavily involved in 5G. According to Bloomberg, the 5G infrastructure market could grow by nearly $96 billion from 2023 to 2030. In addition, the company also engages the broader space economy with its satellite platforms. Per McKinsey & Company, the space economy could hit $1 trillion by the start of the next decade.

No, I don’t expect Qualcomm to dominate every tech subsegment. But by picking pieces here and there, yes, it could eventually be one of the trillion-dollar companies. Also, it’s on discount trading at only a 13x forward earnings multiple. What’s not to like?

IBM (IBM)

Photo of IBM (IBM) building as seen through the canopy of a tree. IBM logo is in large letters on side of building.
Source: shutterstock.com/LCV

Usually, boring enterprises are some of the best investments ahead of economic uncertainty. However, in other cases, a company can be so boring that it becomes controversial for frustrating investors. That might describe the legacy tech juggernaut IBM (NYSE:IBM). As much as I like the enterprise, generating a trailing-five-year performance of 26% up is disappointing.

To be fair, IBM offers a forward dividend yield of 4.53%, which you’re simply not going to get with the tech sphere. Ironically, though, that yield will certainly hamper any quick ambitions IBM might have of eventually becoming the next trillion-dollar companies. As the entities sitting on the milestone will likely attest, you want to reward the business, not necessarily the shareholders.

However, let’s just say we can add 20 years to our average lifespan, along with a healthy dose of inflation. With these generous tailwinds, IBM could rise substantially higher thanks to artificial intelligence. Per Grand View Research, the global AI market may hit a valuation of $1.81 trillion.

With patience and Big Blue’s AI acumen, it could be a big winner.

Pfizer (PFE)

blue Pfizer logo on the windows of a corporate building PFR stock
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Probably the most controversial idea on this list of the next trillion-dollar companies for myriad reasons, Pfizer (NYSE:PFE) can’t please anyone these days. On one hand, you have folks that don’t like the underlying business and industry. And on the other hand, you have investors that are displeased at the market performance. Since the beginning of the year, PFE lost 42% of equity value. Ouch.

Now, with a market cap around $168 billion, it still has a chance of reaching extraordinary ground. But would it rank among trillion-dollar companies? That’s going to be a stretch but I wouldn’t completely discount it. After all, the ability for Pfizer and its partners to leverage messenger-RNA technology and quickly develop a vaccine offers potential.

Of course, I don’t expect another Covid-19-like crisis to capsize the world and hold us hostage. However, just the mRNA therapeutic market size could hit almost $138 billion by 2032, per Precedence Research. Combined with other synergies stemming from mRNA research, PFE offers an interesting outside bet.

Disney (DIS)

Disney logo on a store front. DIS stock.
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Currently, Disney (NYSE:DIS) doesn’t exactly offer a confident profile for becoming one of the next trillion-dollar companies. As I mentioned in my interview with CGTN America anchor Phillip Yin, Disney not too long ago got into a heavy dispute with Spectrum under Charter Communications (NASDAQ:CHTR). Also, the Magic Kingdom has been stuck in a longstanding ideological dispute about going woke.

Nevertheless, some encouraging signs exist. For example, the company posted sharp profit growth for its fiscal fourth quarter, per an AP report. Specifically, net income jumped 63% to $264 million in the three months ended Sept. 30. That’s up from $162 million in the year-ago quarter. As well, revenue increased 5% to $21.24 billion, demonstrating the power of the Disney brand.

Now, historical results don’t guarantee future performances, I get that. Still, I also believe that Disney essentially owns a license to print money thanks to its enviable content library. Just the Star Wars franchise is worth about $70 billion. Over time through multiple spinoffs and marquee sequels – and combined with other core businesses – Disney may have an outside shot.

Lockheed Martin (LMT)

Close top view of a Lockheed Martin (LMT) F-35C Lightning II with afterburner on
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An inherently controversial enterprise due to its aerospace and defense specialties, Lockheed Martin (NYSE:LMT) isn’t exactly an idea for everyone. However, I can’t lie. For purely cynical reasons, LMT could be among the next trillion-dollar companies. To be 100% clear, I’m not celebrating such a possible pathway to the milestone. Obviously, that would imply at the very least significant geopolitical tensions.

At the same time, as we have learned, some circumstances cannot be resolved through sitting down and starting a dialogue. While debate exists about the inevitability of war, history suggests that military conflicts will invariably arise at some point. And the worst part is that the catalyst can sometimes be as awfully simple as imperialism. About the only counterweight to this is for rational nations to arm themselves.

Given that we appear to be hurtling toward geopolitical instability combined with the competition for rare resources, Lockheed Martin seems a no-brainer. Even if it never becomes one of the trillion-dollar companies, over time, it’s a reasonable wager based on fundamentals.

Exxon Mobil (XOM)

Exxon Retail Gas Location
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Perhaps the most what-the-heck idea among the next trillion-dollar companies, Exxon Mobil (NYSE:XOM) might not seem to make sense. Sure, as I mentioned earlier, the entire value chain of the electric mobility market is hurting badly. However, as contrarians might argue, this too shall pass. Plus, EVs quite simply represent the future. Hydrocarbons represent the past.

Nevertheless, it may be tough for the rest of America (and the world) to transition to EVs. First and foremost, a radical transformation of infrastructure must take place. Even then, the industry incurred hiccups with its charging plug format war. This is the type of confusion that only discourages consumers from making the switch.

Another factor to consider is that not everyone has access to home charging. Also, because we’re talking about a ridiculous magnitude of power, EV charging in one’s garage poses risks. I don’t want to exaggerate the situation but when things go bad, it can go really bad.

Finally, with natural population growth, energy diversification – not exclusivity toward one form – may be critical. Therefore, I’m going XOM a puncher’s chance to $1 trillion.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


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