The bear market has been punishing for stocks, crushing hopes and dolling out major losses. While many companies have held up okay, others continue to struggle. It makes investors wonder when we’ll see the next trillion-dollar company.
It wasn’t that long ago that a trillion-dollar market capitalization seemed unreachable. But before long, Apple (NASDAQ:AAPL) grazed a $3 trillion market cap. Then the whole market went south and the bear market really began to growl.
In any regard, the steep decline has many investors wondering what the next trillion-dollar company is and when we’ll see it.
There’s no way to know for sure — particularly on the “when” part of the equation — but here are the stocks that seem most likely to get there.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) was not all that far away from a $1 trillion market cap. At one point in December 2021, the company had a valuation north of $800 billion. It would have taken about a 20% rally for Nvidia to get there in the prior cycle.
While the stock went on to lose two-third of its value from peak to trough, it’s been on a robust rally since. Shares have rallied more than 100% off the recent low as investors continue to pile in.
Part of it seems like momentum driving the action, while some of it feels like “FOMO,” as investors fear missing out on the “next big stock” and the AI revolution, which Nvidia is helping to drive.
Because of its role in current technology, the company should continue to do quite well. The way CEO Jensen Huang positions the company in future technology trends before they become hot is why Nvidia has the potential to be one of the next trillion-dollar companies.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is an easy and obvious name when looking for the next trillion-dollar company. Tesla should be on everyone’s list for the potential to hit this milestone, given that it has already done so before.
In 2021, Tesla sported a market cap north of $1.2 trillion. As recently as mid-September, shares were down just 24% from the all-time high. Then things came to an abrupt halt.
CEO Elon Musk bought Twitter, which only fueled Tesla’s decline as shares fell in five straight months and cratered more than 67% from the August high to the January low. When it finally bottomed near $100, Tesla stock was 75% below its all-time high.
Should it ever get there again — currently at $414.50 — it will represent a gain of just over 300% from the low.
While a global recession is the obvious risk, the company’s automotive and energy components continue to drive growth. For example, analysts expect 27% and 31% growth in 2023 and 2024, respectively.
Berkshire Hathaway (BRK-B, BRK-A)
Last but not least, we have Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B). However, there’s two main risks with this pick as the next trillion-dollar company. That is Warren Buffett and Charlie Munger.
While those two money managers may be the firm’s biggest assets, there are worries that when they are gone, they will turn into Berkshire’s biggest liabilities.
However, Buffett and Munger have built Berkshire into a powerhouse, as it has amassed a $700 billion market cap. At its highs, it sported a market cap of $800 billion. I believe Buffett & Co. have built a system that will allow Berkshire to continue flourishing long after they have stepped down.
That goes for Berkshire’s impressive list of portfolio managers, but also for the company’s impressive investments. As the world continues to push forward, so too will Berkshire’s largest positions (and savvy deals) and eventually, that should tip the company into the trillion-dollar club.
On the date of publication, Bret Kenwell held a long position in TSLA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.