The US Senate is sometimes called “the most exclusive club”. However, I can think of a club that is much more exclusive than the legislative body, which has 100 members. It’s the $3 trillion club.
Only three companies in the world boast a market capitalization of $3 trillion or more: Apple, MicrosoftAND Nvidia. But this club may be 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 in the driver’s seat to become the next $3 trillion company. The market cap of Google’s parent currently stands at around $2.3 trillion. At the rate the stock is rising, Alphabet could join Apple, Microsoft and Nvidia by early 2025.
Most of Alphabet’s revenue and profits continue to be generated by its Google Search business. While some have predicted that the rise of generative AI poses an existential threat to search engines, Google has thrived. CEO Sundar Pichai noted in Alphabet’s first-quarter earnings call that Google’s new AI insights have increased search usage and user satisfaction with search results.
Google Cloud should enjoy a headwind from AI for years to come. Unit sales rose 28% year over year in the first quarter with operating income up 371%. Google Cloud is particularly popular with AI-generating startups, with more than 60% using its cloud service.
YouTube is another major growth driver for the company. It is the leader in US streaming with viewers watching over 1 billion hours of content every day. YouTube now has over 100 million music and premium service subscribers, while YouTube TV claims over 8 million paid subscribers.
2. Amazon
Amazon (NASDAQ: AMZN) it’s not far behind Alphabet, with a market cap hovering around $2 trillion. I fully expect the e-commerce and cloud services giant to take a place in the $3 trillion club within the next two or three years.
Like Google Cloud, Amazon Web Services (AWS) should deliver strong growth in the coming years thanks to demand for building and deploying AI models. AWS is the market leader in cloud services. I suspect it will stay on top due to the traction of new products like the AI-powered software development assistant Q.
Amazon dominates the e-commerce market. Cost improvements in the company’s e-commerce platform and distribution network have helped boost profitability. As Amazon further increases delivery speed, its e-commerce revenue and profits should increase as customers shop online more often.
Advertising is also an important growth engine for Amazon. In the first quarter, ad sales were up 24% year over year on a constant currency basis. This growth may increase in the future as Prime Video advertising gains momentum.
3. Meta Platforms
Meta Platforms (NASDAQ: META) has a steeper hill to climb to join the $3 trillion club. The social media leader’s market cap of $1.3 trillion is well below Alphabet and Amazon’s market cap. However, I think it’s only a matter of time before Meta hits the $3 trillion mark.
The company is an advertising scam. Its apps, including Facebook, Instagram, Messenger and WhatsApp, reach more than 3.2 billion people worldwide every day. Advertisers cannot ignore such a large audience.
Meta’s efforts to more efficiently monetize its products, especially Reels, are paying off. Earnings more than doubled year over year in the first quarter. The company continues to get better and better at showing ads to the right person at the right time.
AI presents a huge growth opportunity for Meta. In particular, CEO Mark Zuckerberg believes that AI-powered business messaging will be the “next mainstay” of the company’s business.
Should you buy these future members of the $3 trillion club?
You might think Alphabet, Amazon, and Meta are no-brainer stocks to buy if they’re truly on track to join the $3 trillion club. And you would be right, in my opinion.
All three stocks have tremendous growth prospects. The growth drivers already mentioned do not tell the full story. For example, robotaxis could be big opportunities for Alphabet’s Waymo and Amazon’s Zoox units. Meta could be a bigger winner in virtual reality and metaverse. I think Alphabet, Amazon and Meta are great stocks to buy and hold.
Don’t miss this second chance at a potentially lucrative opportunity
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Amazon: if you invested $1,000 when we doubled in 2010, you would have $21,904!*
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Apple: if you invested $1,000 when we doubled in 2008, you would have $43,562!*
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Netflix: if you invested $1,000 when we doubled in 2004, you would have $349,245!*
Right now, we’re issuing Double Down alerts for three incredible companies, and there may not be another chance like this anytime soon.
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*The stock advisor returns as of July 8, 2024
Randi Zuckerberg, a former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive 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. Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 Microsoft calls and short January 2026 $405 Microsoft calls. The Motley Fool has a disclosure policy.
3 Unstoppable Stocks That Could Join Apple, Microsoft, and Nvidia in the $3 Trillion Club was originally published by The Motley Fool