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A trillion-dollar valuation by a single company was once unthinkable even just a few years ago. After all, the S&P 500 was created in 1957 when the total market capitalization of the index was $172 billion. Today, 41 of the stocks comprising the index have a valuation greater than that.
Now there are six stocks worth over $1 trillion. Apple (NASDAQ:AAPL) is worth $2.8 trillion itself, some 16 times more than the entire S&P 500 was worth nearly 70 years ago. It could lose more than half its valuation and still be worth more than $1 trillion!
Because companies continue to innovate, acquire, and grow, it’s natural and expected that we will see even more companies hit 13-figure valuations in the future. Over the next decade or so, the following three companies will become the next trillion-dollar stocks.
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Visa (V)
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Top payment processor Visa (NYSE:V) is already almost halfway to the finish line at $488 billion. It will only require 6% compounded annual growth for it to cross over the threshold.
Wall Street forecasts that Visa will grow earnings 15% annually for the next five years, slightly less than the 20% annual growth it saw over the last five years. Yet it stands a greater chance of growing earnings faster than the forecast. Visa currently processes 86% more payments volume than nearest rival Mastercard (NYSE:MA), $10.9 trillion worth as of the end of 2021.
A bet on Visa becoming a trillion-dollar stock by 2035 is a bet on the long-term growth in U.S. consumer spending, and on an ever-expanding U.S. economy. Both seem like fairly safe bets. Not that it will occur in a straight line. It will likely even suffer periods of stagnation and decline. Overall, though, Visa seems an easy pick to hit a trillion-dollar valuation.
Meta Platforms (META)
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Facebook owner Meta Platforms (NASDAQ:META) can see the end goal in the distance because it has a $788 billion as of this writing. It also once was worth over a trillion dollar not that long ago before the stock retreated. To borrow a football metaphor, it should easily be able to move the chains down the field again.
Whatever the problems people have with social media, and they are legion, billions still use them on a daily basis. Meta is the premiere social media platform, for good or ill. Facebook, Instagram, and WhatsApp are a killer trio of apps that engage a combined 3.8 billion monthly active users.
It also recently launched so-called Twitter-killer Threads. While it did manage to sign up 100 million users in a few days of launching, the jury is still out on whether it has legs. And few companies have as much invested in the metaverse as Meta Platforms. If that pans out as expected — even goes half the way — Meta will score big and should readily see its valuation rise.