Billion-dollar companies are some of the most valuable companies. They lead the stock market and have become an integral part of the economy. Once, such companies were a rarity, but today there are many. These billion-dollar stocks are vying for the trillion-dollar spot and as they chart the upward journey, it is time to give them a spot in your portfolio so that you can be a part of their success.
These are, of course, highly profitable businesses with an edge in the industry. They are known to offer the best products and services to meet the demands of users and they have a growth strategy that works in their favor. Here are seven billion-dollar stocks that deserve a place in your portfolio this year. Let’s take a look at them in detail.
Eli Lilly (LLY)
One of the top pharmaceutical companies, Eli Lilly (NYSE:LLY) has a market valuation of $893 billion, and it is one of the best stocks to own right now. The company is known for the weight loss drug Zepbound. As compared to the other drugs, Zepbound leads to a faster weight loss which has taken the company’s sales by storm. It generates the majority of revenue for Eli Lilly.
However, LLY is struggling to meet the demand for its weight loss. But the pharmaceutical company is not limited to just one drug. Its Alzheimer’s drug, Donanemab was recently approved. And it is also working on other two weight loss drugs, one being an oral pill.
It is buying Morphic Holding (NASDAQ:MORF) for $3.2 billion, the company develops treatments for chronic diseases, and the deal will help Eli Lilly expand into the gastroenterology medical segment. Undoubtedly, Eli Lilly is one of the best pharma stocks to own. Currently LLY stock is up 60% year-to-date, and is an ideal stock split candidate.
Advanced Micro Devices (AMD)
Nvidia’s (NASDAQ:NVDA) biggest competitor, Advanced Micro Devices (NASDAQ:AMD) is another billion-dollar stock with a significant upside potential. While AMD stock hasn’t rallied as much as Nvidia, it is slowly but steadily making an upward stride. Trading at $181 today, the stock is up 31% YTD and looks undervalued to me. There are multiple catalysts working for the company.
Artificial Intelligence will boost the company’s revenue and as the business grows, its revenue will soar. In the first quarter, it saw the data center sales grow 80% YOY and it is expecting to achieve sales of $4 billion from the MI300 this year. The company is expanding its reach by buying Silo AI, the largest private AI lab for $665 million.
As the data center business grows, AMD will see rapid growth but investors should not compare it to Nvidia. The company is charting its own path to success and might not be number one but is a compelling investment with a market cap of $294 billion. Wells Fargo has recently increased the price target of the stock to $205, an 11% upside.
Taiwan Semiconductor Manufacturing (TSM)
Chipmaker Taiwan Semiconductor Manufacturing (NYSE:TSM) has become a hot stock this year. Up 84% YTD, it is exchanging hands for $187 right now and there’s no stopping its upward momentum. Driven by AI frenzy, the stock has had one of its best years.
The company recently reported second-quarter revenue and easily beat market expectations. Its revenue came in at $20.67 billion, representing a 40% growth in the quarter. TSM is one of the best billion-dollar stocks to own.
A supplier to industry stalwarts, including Apple (NASDAQ:AAPL) and Nvidia, TSM has managed to offset the weak smartphone sales with a surge in AI chip sales. Buying the stock below $200 could be a smart move. This stock is going to hit new highs with the current AI hype.
To keep up with the rising demand, it has planned capital expenditure in the range of $28 billion to $32 billion this year and it will be focused on enhancing the technology capacities. It is also expanding in Japan and Europe to ensure effective demand responsiveness.
Oracle (ORCL)
Another tech company seeing massive highs is Oracle (NYSE:ORCL). A legacy software company, Oracle has been around for a long time now and it understands how the market works. The company has benefited from the global transition towards cloud and its cloud infrastructure revenue has seen a massive upside.
Exchanging hands for $142, the stock is up 39% YTD and has been on an upward rally since May. Its fundamentals are impressive and the company enjoys a dividend yield of 1.12%, rewarding investors with passive income.
Known for offering the best AI data center infrastructure globally, Oracle saw a 44% jump in outstanding performance obligations in the recent quarter, including new AI deals of $12.5 billion.
The data center revenue jumped 42% YOY and the company is already building 100 new data centers to meet the global demand. It has partnered with some of the top tech giants and the soaring AI demand could boost its valuation. The stock will hit $200 this year.
Netflix (NFLX)
Streaming giant Netflix (NASDAQ:NFLX) is a household name today with the company valued at $281 billion. While it is nowhere close to a trillion-dollar valuation, it is steadily moving higher and taking giant strides in the industry. Up 38% YTD, NFLX stock is exchanging hands for $647 and is a long-term buy and hold.
It is the largest player in the streaming space and has seen massive subscriber growth. It added 9.3 million subscribers in the first quarter to reach about 270 million. The company’s investment in new content has made it a top choice for viewers. No other streaming giant comes close to its market share.
Netflix is looking for different ways to attract users and drive growth and video games are one of them. It is growing the game library and has about 100 game titles with 32 experiences on the platform. They are free right now but the management could consider monetizing this segment very soon. It is also expanding into sports and live entertainment.
The company is set to report results on July 18 and the stock is a buy before that.
Visa (V)
Fintech giant Visa (NYSE:V) is one of the top billion-dollar stocks worth adding to your portfolio for the long-term. The company is valued at $525 billion and the stock has remained flat over the past six months. It is exchanging hands for $265 today and has been moving in the range of $258 to $290 since the beginning of the year. One solid reason to own the stock is its reliability and steady performance.
Visa has a global presence which ensures it remains stable even in market ups and downs. The company generates a fee on every transaction processed through the Visa card and as we move towards cashless transactions, the demand for cards will grow and Visa will benefit. With more than 4 billion cards issued, the company is one of the top fintech players right now.
Despite a high-interest environment and inflationary pressure, the company reported a 10% revenue jump and an 11% rise in processed transactions in the first quarter. You may not see an immediate upside in the stock, but it is a highly dependable stock to own. Visa also enjoys a dividend yield of 0.79%.
Chevron (CVX)
If you are a dividend investor, you are going to love Chevron (NYSE:CVX) stock. The oil and gas giant had some of its best days in 2022 with oil prices soaring. While it is down from the highs it achieved then, CVX stock is up 4% YTD and exchanging hands for $155.
The company is valued at a market cap of $286 billion and while many believe that its best days are over due to the transition towards renewables, I tend to disagree.
The transition is going to take a few years and then too, the demand for oil will never drop to zero. Chevron has an upward and downward stream business that steadily generates cash flow. As the oil prices soar, Chevron benefits, and with oil trading close to $80 per barrel, it will continue to see revenue growth.
The company has also invested in the hydrogen sector and is trying to diversify its revenue streams. It is a cash flow machine with a dividend yield of 4.20% and a history of 37 years of hiking dividends.
On the date of publication, Vandita Jadeja did not hold (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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
