If you were asked how many firms currently are valued at $1 trillion or more based on market cap, what would you guess? The answer might surprise you. It’s six. Of those six, one, Saudi Aramco, Is not readily accessible to American investors as it isn’t listed on commonly accessed exchanges. Anyway, long story short, reaching a valuation of $1 trillion is an extraordinary feat. This has led us to this article on what brands could be the next trillion-dollar stocks.
Investing in such companies inherently makes sense. These companies are extraordinarily powerful and due to their extreme success are likely to continue to thrive. The three companies listed below could be the next trillion-dollar stocks.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) Is currently the 7th most valuable publicly traded stock overall. It boasts a market cap of $966 billion at the time of writing. Thus, Meta Platforms is very close to being considered one of those trillion-dollar stocks.
If and when Meta Platforms reaches $1 trillion it won’t be the first time it has achieved the feat. In late 2021 the company – then named Facebook – surpassed the mark. Shares are currently retesting those former highs in part due to positive remarks from Mizuho Securities. Analysts there recently increased their 12-month target price from $400 to $477. If shares rise to that level, that would be almost exactly $100 above price levels when the shares first eclipsed the $1 trillion mark.
Arithmetically, that would suggest that Meta Platforms’ market capitalization would increase by more than 26% leading to a new evaluation above $1.2 trillion. It’s an entirely reasonable expectation given how strongly the company has rebounded in 2023 and into early 2024.
AMD (AMD)
In reality, AMD (NASDAQ:AMD) is quite far from realistically reaching $1 trillion in valuation. However, AMD has made such significant strides over the last few years that it warrants discussion.
Today, AMD’s market cap is as high as it’s ever been, just above $260 billion. The company essentially has to quadruple in value to reach $1 trillion. Current projections suggest it could happen by the year 2031 based on share prices alone and the assumption that float does not increase.
Certainly, other stocks much closer to $1 trillion in market cap at the moment are likely to cross that threshold first. However, I want to note just how rapidly AMD has grown over the last decade. In 2015 it was valued at less than $2 billion. The company has grown by a factor of 130 in less than a decade.
Today, AMD is carving out a position as a legitimate challenger to Nvidia about artificial intelligence. The company will release its mi300 chips this year. Those chips are already seeing substantial demand from dominant firms that scoop up large volumes of chips for generative AI purposes.
Taiwan Semiconductor Manufacturing (TSM)
2024 promises to be a very interesting year for Taiwan Semiconductor Manufacturing (NYSE:TSM) and its stock. The company is known to be the largest foundry in the semiconductor industry. It is responsible for the technology behind the leading chips which it manufactures for the world’s best-known chip companies including Nvidia (NASDAQ:NVDA), AMD, Apple (NASDAQ:AAPL), and more.
Taiwan semiconductor manufacturing’s market cap has only eclipsed $700 billion once in its history. it is currently valued at less than $600 billion. However, the company’s recent bullish projections for 2024 chip production are a strong signal overall. The company expects the revenue growth to be above 20% this year.
That growth rate is roughly double that expected across the wider semiconductor sector overall. The bullish take here is that 2024 is shaping up to be a period of continued growth overall. Additionally, Atlanta Federal Reserve President Rafael Bostic Stated that he expects rate cuts to be implemented earlier than he had previously anticipated. Should that occur, it’s reasonable to believe that the tech sector will receive a boost which could drive Taiwan Semiconductor Manufacturing even higher.
On the date of publication, Alex Sirois 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.
