Investors, analysts, and the media love discussing, debating, and analyzing stock valuations. A lot of ink spilled recently when chipmaker Nvidia’s (NASDAQ:NVDA) market capitalization surpassed $3 trillion, briefly holding the title of the world’s most valuable publicly traded company.
A $1 trillion market cap seems to be a key benchmark within the investing sphere. Once companies achieve that threshold, they enter the realm of mega-cap stocks, exerting outsized influence on the broader market due to their size. Currently, only six companies in the world have a market cap above $1 trillion. All of them are technology stocks. The rest of the market has to look on with envy.
So, which stocks will enter the $1 trillion club next? Here are three tech stocks teetering on the brink of trillion-dollar greatness.
Trillion-Dollar Tech Stocks: Netflix (NFLX)
Netflix (NASDAQ:NFLX) is in a good spot right now. While other streaming companies flounder, Netflix is thriving. The company’s earnings report for this year’s first quarter was a blowout, helping to send its share price 45% higher. The company has a market capitalization of just under $300 billion. What could help push the stock’s market value to $1 trillion? Its new push into live sports and entertainment could be the needed catalyst.
Following the success of its live broadcast of the Tom Brady celebrity roast, Netflix is pushing hard into live events and sports competitions. The company has entered into a $5 billion deal to stream World Wrestling Entertainment’s weekly flagship program “Raw” starting in 2025. Netflix plans to livestream a boxing match between Jake Paul and Mike Tyson this November. The company is scheduled to broadcast an NFL football game on Christmas Day this year.
Netflix is even live streaming a popular hot dog eating contest on Labor Day this year that will feature a heavily hyped contest between world champions Joey “Jaws” Chestnut and Takeru Kobayashi in an event Netflix is calling: “Chestnut vs. Kobayashi: Unfinished Beef.” Adding live sports and entertainment should push NFLX stock to new heights and potentially make it the next trillion-dollar tech stock.
Broadcom (AVGO)
Chipmaker Broadcom (NASDAQ:AVGO) is close to becoming a $1 trillion tech stock. The company’s market cap is presently at $750 billion. This was after the company reported strong quarterly financial results that boosted its share price. Year-to-date, AVGO stock is up 46%. Strong demand for the company’s microchips and semiconductors, driven by artificial intelligence (AI), could push the stock over the $1 trillion threshold.
Also working in Broadcom’s favor is an upcoming 10-for-1 stock split. The company’s shares will begin trading on a split-adjusted basis on July 15. While the split doesn’t change the stock’s fundamentals, it will make it more affordable to retail investors, which could lead to a rise in the share price. Beyond demand for its AI chips and processors, Broadcom is also getting a revenue lift from VMware, the enterprise software company it acquired for $69 billion in 2023.
It might not be long before Broadcom joins the $1 trillion club.
Tesla (TSLA)
Electric vehicle maker Tesla (NASDAQ:TSLA) has been in the $1 trillion club before, so it won’t take much to get the stock back there. Currently, Tesla’s market cap stands at $600 billion after the company’s stock has fallen over the past 18 months. So far in 2024, TSLA stock has declined 22%. But a rebound could be in store if Tesla can manage to boost its vehicle sales and successfully transition into new areas.
Tesla CEO Elon Musk is doing his best to get the company back on track. He announced plans for a lower-priced electric vehicle to hit the market in 2025. At the same time, Tesla is pushing into entirely new tech areas, including supercomputers, AI, and robots. The company has unveiled a prototype for a humanoid robot it calls “Optimus.” It will take time, but TSLA stock could rise above a $1 trillion valuation if its shares catch fire again.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
