By hitting the elusive $3 trillion mark in valuation last month, Microsoft (NASDAQ:MSFT) reignited the debate over trillion-dollar companies.
This monumental achievement, fueled by the burgeoning artificial intelligence sector, marks a significant moment in the financial realm. Microsoft’s shares surged remarkably last month, propelling the tech giant beyond Apple (NASDAQ:AAPL), its long-standing rival, to fleetingly claim the title of the world’s most valuable publicly traded company.
With the landscape ripe with opportunity, Microsoft’s ascent not only highlights the impact of innovation on valuation but serves as a beacon for those aiming to diversify their portfolios with assets poised for massive long-term growth. As we navigate through this era of tech expansion, the key to unlocking robust long-term gains lies in identifying businesses with the potential to join the exclusive trillion-dollar club. With that said, here are seven gems poised for unparalleled financial prosperity.
Eli Lilly (LLY)
Eli Lilly’s (NYSE:LLY) journey towards a trillion-dollar market cap is gaining momentum, with the monumental success of its weight loss drug, Mounjaro. The pharma titan has seen its stock soar to unprecedented heights, with Mounjaro contributing almost 25% of its sales. This surge underscores a larger trend in the healthcare sphere, where innovative weight loss solutions are becoming investor magnets.
Furthermore, the company’s recent earnings report further cements its stellar market dominance, showcasing a solid 28% year-over-year bump in sales to $9.4 billion. This growth is primarily fueled by its GLP-1 agonists, Mounjaro and Zepbound, which have made significant strides in the diabetes and weight loss markets. Additionally, the active ingredient, tirzepatide, found in both Mounjaro and Zepbound, is exploring new therapeutic horizons, including treating certain types of fatty liver disease. This versatility unlocks new revenue channels, further solidifying the firm’s financial outlook and powerful trajectory.
Visa (V)
For over six decades, Visa (NYSE:V) has solidified its stronghold in the credit and debit card sector, leading with innovation and strategic growth initiatives.
Visa’s financial health remains exceptional, marked by its healthy profit margins. The company boasts a staggering 98% gross profit margin and an impressive 54% net income margin YOY, reflecting its efficient operations and robust position. Moreover, in the first-quarter of fiscal 2024, Visa reported a 9% growth in revenue and a 17% increase in net income YOY, further underscoring its ongoing success.
Additionally, Visa’s commitment to returning value to its shareholders is unwavering, with $3.4 billion in stock buybacks this quarter, along with an impressive $26.4 billion still authorized for future repurchases. Likewise, it boasts a track record of growing its dividend payout for 15 consecutive years. Also, the company’s recent acquisition of Pismo, a cloud-native platform based in Brazil known for issue processing and core banking, is a testament to the company’s ambition to expand its footprint in the global markets.
Adobe (ADBE)
Adobe (NASDAQ:ADBE), a pivotal force in the software sphere, has carved a niche for itself by catering to business and creative needs. The firm’s subscription-based model is a beacon of financial stability, yielding handsome monthly recurring sales. This strategic approach has added new layers to its illustrious growth story, with Adobe’s free cash flow, which stands at a remarkable $6.6 billion, marking more than a 120% increase from its 2018 figure of $2.9 billion. Such financial prowess has rendered Adobe a lucrative bet for long-term investors, with shares soaring more than 60% in the past year alone.
The cornerstone of Adobe’s success lies in its recurring sales from software subscriptions, with the digital media segment alone generating annual recurring sales of $15.17 billion. This consistent revenue stream resulted in 12% YOY revenue growth in the fourth-quarter. Looking ahead, Adobe is poised for continued prosperity, projecting fiscal 2024 sales between $21.30 billion to $21.50 billion. This forecast suggests a promising 10.3% growth in YOY revenue, underscoring its stellar growth trajectory. Moreover, Adobe anticipates a significant uptick in its diluted GAAP earnings per share, targeting a midpoint GAAP EPS of $13.65, representing a 15.5% jump YOY.
JP Morgan Chase (JPM)
In the financial arena, JP Morgan Chase (NYSE:JPM) stands as a titan, with its financials painting a picture of formidable growth and profitability that comfortably outshines its peers. With a YOY revenue bump of 19.4%, YOY, JPMorgan easily eclipses the sector median of 4.70%. Moreover, its net income margin of 33.94% and return on common equity stand of 16.89% comfortably sit above the sector’s medians. Such metrics result from the firm’s strategic foresight and an unyielding commitment to excellence.
Amidst this backdrop of financial robustness, JPMorgan laid out its ambitious plan to inaugurate more than 500 new branches and refurbish an additional 1,700 in the next three years. This move is poised to bolster JPMorgan’s presence nationwide, enhancing its commercial banking experience while fostering customer loyalty and recurrent revenue streams. Moreover, with a 2.4% dividend yield and a track record of nine consecutive years of growth, JPMorgan’s strategy is a call to investors seeking stability and growth amidst market uncertainty.
Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ), a behemoth in the healthcare industry, continues to accentuate its prowess through diversified product lines spanning various sectors, including innovative medicines and Medtech. This diversification is a strategic and major catalyst, propelling the company to new heights. Additionally, the foray into Medtech, in particular, showcases JNJ’s ability to stay ahead of industry trends, driving sales and solidifying its market position. This growth narrative is further bolstered by an impressive record of increasing dividends for 61 consecutive years, including a notable 5.3% increase to $1.19 per share in 2023.
Furthermore, JNJ’s recent quarterly earnings report showed solid revenues of $21.4 billion and an EPS of $2.29, with notable jumps in both the medical devices and pharmaceutical segments. Additionally, the company’s aggressive growth strategy is evident in its key acquisitions, including the $16.6 billion takeover of Abiomed in 2022 and the upcoming $2 billion purchase of Ambrx this year, pointing to its commitment to innovation and market expansion.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG), a giant in the consumer staples sector, boasts a powerful legacy as a dividend aristocrat with a track record of raising its dividends for an impressive 67 years. Moreover, it remains on solid ground financially, wrapping up another successful quarter with a solid 4% organic sales growth. This growth in its second-quarter results is a testament to the company’s enduring market resilience and strategic focus on key global markets, including North America, Europe, Latin America, and Asia Pacific.
Aiming for an organic sales growth of 4% to 5% for the year, Procter & Gamble’s ambition reflects confidence in its powerful business model and diversified brand portfolio, which continues to drive sales. This optimism is echoed by analysts, as evidenced by a ‘moderate buy’ rating from Tipranks, projecting an 8% upside potential. The company’s strategic maneuvering and emphasis on growth underscore its dominance in the consumer staples sector and its commitment to delivering shareholder value.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is a top semiconductor and software player known for handsomely rewarding its investors over the years. AVGO has outperformed most of its peers over the past three years between dividend growth, stock price appreciation, and buybacks. AVGO stock has posted a whopping 159% gain during that time. Moreover, it yields an enticing 1.7% with 13 consecutive years of dividend payout growth.
The firm delivered another surprise in the third-quarter of fiscal 2023, marking the 14th consecutive quarter where it bested analyst estimates across both lines. Moreover, it announced a 5% YOY revenue growth and 7.4% YOY net income growth in its report.
Furthermore, the company’s Trident 5-X12 chip will likely deliver more market share and financial growth. This chip uses 25% less power per 400G port than the current market-leading Trident 4-X9. In other words, it is a more efficient chip that can help businesses looking to harness the power of AI.
On the date of publication, Muslim Farooque 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
