At the time of writing, there are precisely seven trillion dollar stocks overall. One of them, Saudi Aramco, doesn’t trade in US markets. Thus, there are effectively six trillion dollar stocks to buy currently available to most U.S. investors.
Three of those six trillion-dollar stocks are each valued at more than $3 trillion. Those respective companies have grown in value rapidly, particularly due to the ongoing emergence of artificial intelligence.
AI will likely continue to play a major role in the emergence of the next trillion-dollar stocks. However, there is clear potential for other trillion-dollar companies to emerge from other sectors.
The continuing development and FDA approval of weight loss drugs is another massive opportunity to watch. Sales continue to grow rapidly and the global weight loss drugs market is expected to grow at nearly 50% annually between 2024 and 2029. That rapid growth promises to potentially create the next trillion-dollar stocks. There are lots of reasons for optimism overall, so let’s get into the stocks themselves.
Taiwan Semiconductor Manufacturing (TSM)
If AI is the next big thing, Taiwan Semiconductor Manufacturing (NYSE:TSM) certainly has to be among the top picks for the next trillion dollar stocks. It is estimated that Taiwan Semiconductor Manufacturing makes 92% of the world’s most sophisticated chips.
In other words, it has a hand in the production of all of the chips from the very biggest companies in the world from Nvidia (NASDAQ:NVDA) on down. It is indispensable to the AI opportunity.
The company also intends to charge Nvidia more for the chips it provides the firm. Nvidia CEO Jensen Huang seems to be on board with the price hike, stating that TSMC delivers value. The point here is that TSMC’s top-line performance is likely to improve moving forward given how integral it is to the entire chip sector.
Beyond that, TSMC is already quite close to the $1 trillion market cap threshold. As I write this article, the company’s market cap sits at $931 billion. If TSM stock reaches its high target price of $200, its market will push above $1 trillion.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) stock currently boasts a market cap of approximately $850 billion. It is currently expected that Eli Lilly will be worth $4 trillion in a few short years. $1 trillion seems to be a foregone conclusion.
If LLY stock reaches its high target price, it will rise above $1 trillion in value. Eli Lilly reported $34.12 billion in revenues in all of 2023. The company expects to report more than $70 billion in revenues by 2027.
One of the current hurdles facing Eli Lilly is simply reinvesting revenues back into manufacturing in order to meet soaring demand for GLP-1 agonist drugs. Nevertheless, the company doesn’t expect to be able to meet demand in 2024 and perhaps even in 2025. The point here is that Eli Lilly shares have strong growth catalysts to look forward to. Media outlets consistently wondered aloud whether a pharmaceutical company could ever be valued at $1 trillion. Eli Lilly is certainly going to get there, and probably first.
Investors should pay particular attention to the development of an oral weight loss drug. That delivery modality is much preferable to injections.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) has to be high on the list of any investor seeking the next trillion-dollar stock to buy. It continues to emerge as one of the best AI shares for investors to consider.
The company released earnings on June 12 which contained a few important pieces of information. One, revenues were better than anticipated. Broadcom indicated that AI was responsible for the better-than-expected results. In the same report, Broadcom also announced a 10-for-one forward stock split.
10-for-one forward stock splits are becoming a popular tool for high-priced tech stocks. Nvidia recently enacted such a stock split with very positive results. Its valuation has soared above $3 trillion, partially due to the positive effects of that split.
AVGO share prices have risen from $1,495 to $1,802 in the week following the announcement. Split-adjusted trading will begin on July 15. One of the interesting things to pay attention to is whether the high target price will be adjusted from its current level of $2,050 to $205. Or, will it be adjusted above $205 to account for the effects of affordability on demand?
Berkshire Hathaway (BRK-B)
Berkshire Hathaway (NYSE:BRK-B) stands out as the only share on this list which is neither a tech nor a pharmaceutical stock.
It’s also arguably the safest stock on this list. The company and its shares benefit from the long-term value created by the Warren Buffett investment strategy. It’s a strategy that relies on identifying durable competitive advantages found by scouring the income statement, balance sheet, and cash flow statements of companies, primarily in the U.S.
It’s the opposite of finding the next big opportunity and instead identifying special companies that are already well-established but underappreciated.
The slow and steady approach creates predictability which is manifest in the steady market cap growth of Berkshire Hathaway.
The company’s valuation has grown from roughly $550 billion at the onset of the pandemic to nearly $900 billion today. Likely, Berkshire Hathaway will soon enter $1 trillion market cap territory. It’s probably the best choice for investors who don’t want to ride the emotional roller coaster that tech and pharma stocks are likely to offer while approaching $1 trillion.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) stock is approximately 63% of the way to the one trillion club. Put another way, its market cap is $630 billion currently.
Novo Nordisk is well-known today because of the emergence and FDA approval of weight loss drugs. Ozempic, of course, is one of the leading FDA-approved weight loss drugs which has made NVO stock very valuable.
While the weight loss market opportunity continues to be huge and will certainly propel Novo Nordisk higher, the opportunity is much bigger. Ozempic and other formulations of the active ingredient semaglutide have wide-ranging efficacy for several costly and prevalent health conditions. The company announced the presentation of data related to semaglutide for conditions including diabetes, obesity, and chronic kidney disease on June 18.
The value of Novo Nordisk’s stock appears to go well beyond the current weight loss opportunity. Instead, it extends deeply into several of the most costly health conditions globally.
Meanwhile, Novo Nordisk continues to develop an orally administered obesity pill called amycretin. There’s certainly a huge untapped pool of demand for early administered obesity pills. The potential of that drug is another reason to assume Novo Nordisk is almost certain to eclipse the $1 trillion market cap threshold sooner or later.
ASML (ASML)
ASML (NASDAQ:ASML) is a lot like TSMC: Both stocks are dominant forces in the global semiconductor supply chain but are not nearly as well known as Nvidia, for example.
However, there’s plenty of reason to believe investors should place as much money in ASML as Nvidia. It all boils down to the fact that ASML is indispensable to the current AI opportunity.
The company has a monopoly on the extreme ultraviolet (EUV) lithography machine sector. Those machines are integral to the production of the most powerful chips used in AI and elsewhere. ASML is the only company in the space for the most part. The company’s EUV revenues have increased 9X over the last seven years and are expected to exceed legacy system sales this year.
Revenues are also expected to double between 2023 and 2028. ASML has a current market cap of approximately $420 billion. Given projected revenue growth, it’s likely that the company will eclipse $1 trillion in market cap at some point in the next handful of years.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) has the farthest to go to reach one trillion of any of the stocks listed on this list. It is currently valued at $250 billion by market cap so it will have to quadruple in price to reach that level.
Realistically speaking, it doesn’t appear that will occur very soon. AMD reported approximately $22.7 billion in revenues in all of 2023. Those revenues are anticipated to double by 2027. So, logically speaking, there’s no reason to believe the company’s market cap will quadruple during the same period. That said, AMD’s earnings growth is expected to be strong this year and through 2027. It should contribute to making share prices more than double. Thus, I do expect share prices to more than double during that period.
Simply put, AMD should be the beneficiary of rapidly improving internal economics during that time frame.
Again, I still don’t think that’s enough to quadruple its share price within that time. But perhaps AMD will prove capable of bringing some unforeseen innovation to the AI chip space in that period. If so, AMD has every chance of quadrupling during that time frame.
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.
