The U.S. Senate is sometimes called “the most exclusive club,” but I can think of a club far more exclusive than the 100-member legislature: the $3 trillion club.
There are only three companies in the world with a market capitalization of over $3 trillion: Apple, Microsoft, and Nvidia. But this club may become a little less exclusive in the not-too-distant future. Here are three unstoppable stocks that could join Apple, Microsoft, and Nvidia in the $3 trillion club.
1. Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is on track to become the next $3 trillion company. Google’s parent company is currently valued at approximately $2.3 trillion in market capitalization. Given the rate at which its stock is growing, it’s not out of the question that Alphabet could join the ranks of Apple, Microsoft, and Nvidia by early 2025.
The bulk of Alphabet’s revenue and profits continue to come from its Google search business. While some predict the rise of generative AI will pose an existential threat to search engines, Google is succeeding. CEO Sundar Pichai said during Alphabet’s first-quarter earnings call that Google’s new AI perspective has improved search usage and user satisfaction with search results.
Google Cloud should see strong AI tailwinds over the next few years: The division’s first-quarter revenue grew 28% year over year, and operating profit soared 371%. Google Cloud is especially popular with generative AI startups, with more than 60% using the company’s cloud services.
YouTube is another key growth driver for the company. It is the leader in streaming in the U.S., with viewers watching more than 1 billion hours of content every day. YouTube currently has more than 100 million subscribers to its music and premium services, and YouTube TV has more than 8 million paid subscribers.
2. Amazon
Amazon (NASDAQ: AMZN) is not too far behind Alphabet, with its market cap hovering around $2 trillion, and I’m confident that the e-commerce and cloud services giant will also join the $3 trillion market cap club within the next two to three years.
Similar to Google Cloud, Amazon Web Services (AWS) should also see strong growth over the next few years due to the demand for building and deploying AI models. AWS is the leader in the cloud services market, and the appeal of new products such as the AI-powered software development assistant Q is likely to keep AWS at the top.
Amazon dominates the e-commerce market. Cost improvements in its e-commerce platform and delivery network have helped Amazon increase its profitability. If Amazon could further improve delivery speeds, customers would shop online more frequently, which would increase Amazon’s e-commerce revenues and profits.
The story continues
Advertising is also a key growth engine for Amazon: First-quarter ad revenue grew 24% year over year on a constant currency basis, and that growth is likely to accelerate as advertising on Prime Video gains traction.
Meta Platforms (NASDAQ: META) has a tougher road ahead of it to join the $3 trillion club. The social media leader is valued at $1.3 trillion, well below the market caps of Alphabet and Amazon. But I think it’s only a matter of time before Meta hits the $3 trillion threshold.
The company is a powerhouse in the advertising industry: apps like Facebook, Instagram, Messenger, and WhatsApp reach over 3.2 billion users worldwide every day. Advertisers can’t afford to ignore such a huge audience.
Meta’s efforts to monetize its products, especially Reels, more efficiently are paying off: First-quarter profits more than doubled year over year, and the company is getting better at showing ads to the right people at the right time.
AI represents a big growth opportunity for Meta, especially as CEO Mark Zuckerberg sees AI-powered business messaging as the “next big thing” for the company’s business.
Should you buy these stocks that are future members of the $3 trillion club?
If Alphabet, Amazon and Meta are truly on track to join the $3 trillion club, you might think it makes sense to buy these stocks. And in my view, that would be the case.
All three of these stocks have strong growth potential. The growth drivers already mentioned don’t tell the whole story. For example, robotaxis could be a big opportunity for Alphabet’s Waymo and Amazon’s Zoox division. Meta could be a bigger winner in virtual reality and the metaverse. I think Alphabet, Amazon, and Meta are great stocks to buy and hold.
Don’t miss out on a potentially profitable opportunity
Have you ever felt like you missed out on the opportunity to buy the most successful stocks? Then listen to this.
On rare occasions, our team of expert analysts will issue a “Double Down” stock recommendation for a company that we believe is about to explode. If you’re worried you may have missed out on an investment opportunity, now is the best time to buy before it’s too late. The numbers speak for themselves.
Amazon: $1,000 invested when it doubled in 2010 would have been worth $21,904.*
Apple: $1,000 invested when it doubled in 2008 would have been worth $43,562.*
Netflix: If you had invested $1,000 when it doubled in 2004, it would have been worth $349,245.*
We currently have “Double Down” alerts on three great companies, but we may not have another opportunity like this in the near future.
See the 3 “Double Down” stocks »
*Stock Advisor returns as of July 8, 2024
Randi Zuckerberg is a former director of market development and public relations for Facebook and the sister of Meta Platforms CEO Mark Zuckerberg and is a member of The Motley Fool’s board of directors. Suzanne Frey is an executive at Alphabet and is a member of The Motley Fool’s board of directors. John Mackey is the former CEO of Whole Foods Market, an Amazon subsidiary, and is a member of The Motley Fool’s board of directors. Keith Speights owns shares of Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool owns shares of and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The post 3 Unstoppable Stocks That Could Join Apple, Microsoft, and NVIDIA in the $3 Trillion Club was originally published by The Motley Fool.