Companies have clearly defined goals: to grow their customer base, brand power, and global influence, compete with giants like Nvidia (NASDAQ:NVDA), Meta (NASDAQ:META), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and join the shortlist of trillion-dollar stocks.
While this sounds great, reaching a trillion-dollar market cap is a tough mountain to climb. Companies on their way to this peak should offer superior products that their clients love and adapt to the market’s continuously evolving needs.
Like anyone wanting to enjoy a comfortable retirement, I, too, would like to own companies that give me that potential. So, in this article, I’ll shortlist three buy-rated companies that I think have the potential to reach the trillion-dollar milestone.
To come up with the list, I screened for the following criteria:
- Companies nearing $1 trillion market cap/valuations
- Buy-rated stocks
- Double-digit quarterly or yearly revenue growth year over year (according to the latest reporting period)
I then sorted the results from farthest to closest based on their proximity to a $1 trillion valuation.
Broadcom (AVGO)
As a leader in infrastructure software and semiconductor solutions, Broadcom (NASDAQ:AVGO) has a rich history and a reputation as the global leader it is today. With roots from its predecessor, Ma Bell, Broadcom has made its mark as one of the top “go to” companies for cybersecurity, distributed software, mainframe, data management and networking solutions.
Broadcom has further cemented its foothold in the tech sector with its recent acquisition of VMWare, which helps it virtualize desktop operations systems, modernize its customer’s private and hybrid cloud environments, and reach its goal of becoming the world’s number one infrastructure technology firm. Speaking of modernization, Broadcom also has strong connections to AI with its networking products and AI accelerators for AI data centers that solidify its trajectory for growth.
With a market cap north of $560 billion, I won’t blame you for saying it’s a tad early to think it will reach the trillion-dollar mark anytime soon.
However, Broadcom has a strong portfolio of services that can help it cross the finish line.
Its finances aren’t bad either, with Q1 2024 revenue growing 34%.
According to AVGO stock’s strong buy recommendation, analysts also appear optimistic about the company’s prospects as one of the next trillion-dollar stocks.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is one of today’s largest pharmaceutical companies. Its specializes in oncology, neuroscience, immunology and diabetes medications. Eli Lilly’s strong list of products — Humulin, Cymbalta, Adcirca, Yentreve, and the widely popular Mounjaro and Zepbound — propelled it to greater heights.
With its market cap currently around $712 billion, Eli Lilly is close to reaching the trillion-dollar milestone thanks to its growth products, promising pipeline, and phase 2 trials of tirzepatide in treating NASH.
The company’s fiscal year 2023 financials also boasted a 20% year-over-year revenue growth, driven by strong customer reception of its new products. The company also has a promising outlook with GAAP EPS, which is expected to reach $11.80 to $12.30, and revenue of between $40.4 billion and $41.6 billion.
Combine this with the strong buy recommendation from Wall Street experts, and we may have a recipe for another trillion-dollar success.
Berkshire Hathaway (BRK-A)
While almost everyone knows its billionaire owner, Warren Buffet, Berkshire Hathaway (NYSE:BRK-A) may not be as popular with non-investors. Its operations are structured as a holding company for its subsidiaries in various sectors.
Berkshire Hathaway’s main strategy focuses on holding stakes in leading companies and buying undervalued businesses that can be derived from its proven and effective value investing philosophy. A recent example is its acquisition of the remaining 20% interest in Pilot Travel Centers LLC from Pilot Corporation (OTCMKTS:POGHF), which has complete ownership.
Of the three on our list, Berkshire Hathaway is the closest to reaching the trillion-dollar milestone, with its market cap around $899 billion.
The company’s upward trajectory is mostly due to its growth. FY 2023 saw an impressive 21% growth in operating earnings. Net earnings reached $96 billion — a great recovery from last year’s $23 billion loss.
No wonder analysts like those at UBS main Berkshire Hathaway’s buy rating. Its strong management and investment philosophy rooted in Warren Buffet’s value investing principles, which have proven effective for the company, makes it one of the next potential trillion-dollar stocks to make history.
On the date of publication, Rick Orford 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.
