One trillion is a huge number. Just seeing it written down is shocking: 1,000,000,000,000. So it’s no surprise that $1 trillion market caps are a new phenomenon in the stock market.
The first company to overcome the hurdle was Apple in 2018. Currently, there are five US stocks with a market capitalization of $1 trillion or more: Apple, Microsoft, Alphabet, AmazonAnd Nvidia.
But several other companies are knocking on the door. Which ones will join the exclusive $1 trillion club in 2024? Let’s see.
Image source: Getty Images.
Metaplatforms
For Meta Platforms (NASDAQ: META)2023 turned out to be a decent recovery year. The stock has flown somewhat under the radar, even though it is up 170% year to date. That’s only the second Nvidia‘is 219% under Nasdaq 100 components.
Meta has added $542 billion in market cap since January, bringing its current total to about $858 billion.
META market cap data by YCharts.
To cross the $1 trillion mark again (Meta already did this earlier in 2021), the company will need to add about $150 billion in market cap next year – a gain of roughly 18%.
That looks pretty reasonable considering the excellent fundamentals. Revenue grew about 23% and operating margin was 41% in the company’s most recent quarter (the three months ended September 30). Moreover, analysts expect sales to rise another 13% to $138 billion by 2024.
In short, Meta is a hop, skip and a jump away from returning to the $1 trillion club. Investors should be aware of this.
Berkshire Hathaway
Unlike Meta, Berkshire Hathaway‘S (NYSE: BRK.B) the market capitalization has grown by only 14% in 2023. And that is to be expected. The company’s entire approach promotes slow, steady, long-term growth.
BRK.B market cap data from YCharts.
Nevertheless, its massive market cap of $779 billion makes it a real contender to break the $1 trillion mark for the first time next year. That would require a somewhat un-Berkshire-like 25% market cap increase by 2024. However, given the enormous interests in the market, this is possible. Apple.
And as investors have long known, things are changing at Berkshire. Charlie Munger died in November and Warren Buffett, aged 93, has passed on key responsibilities to his successor, Greg Abel.
So 2024 will prove to be a watershed year for Berkshire, if only because it will be the first year without Munger. If the company reaches a market cap of over $1 trillion, this could prove historic in more ways than one.
Tesla
Finally, it’s time to talk Tesla (NASDAQ: TSLA) — by far my spiciest pick to surpass $1 trillion next year. Like Meta, it is a company that has cleared the $1 trillion hurdle before and is aiming to regain its place.
TSLA market cap data from YCharts.
This year, Tesla’s market cap has soared from a low of $342 billion to a high of $931 billion. And not surprising. Tesla remains a polarizing stock for several reasons:
- Statements from Elon Musk.
- The state of play in the electric vehicle (EV) market.
- Tesla’s declining gross margins.
Nevertheless, it is essential for investors to filter out the noise and focus on the big picture:
- Will Musk deliver returns for Tesla shareholders?
- Will EVs continue to gain market share from petroleum-powered vehicles?
- Can Tesla halt the decline in automotive gross margins through greater production efficiency?
I think the answer to all three questions is yes.
And in that case, I believe Tesla can achieve more than the 25% gain needed to increase its market cap to $1 trillion.
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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Jake Lerch has positions in Alphabet, Amazon, Nvidia and Tesla. The Motley Fool holds positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.