Yahoo Finance Want to Invest in the Next Trillion-Dollar Company? These 3 US Stocks May Make the Cut
The rebound in the NASDAQ Composite Index has been nothing short of spectacular.
For the first half of this year, the bellwether technology stock index has jumped by 32%, making this the best first half in four decades.
The strong performance was led by a boom in generative artificial intelligence (AI), sending shares of Nvidia (NASDAQ: NVDA) rallying 190% to surpass the trillion-dollar market capitalisation milestone.
Apple (NASDAQ: AAPL), the inventor of the iPhone and iPad, shot up nearly 50% in the same period to hit an all-time high of close to US$194 and reclaim its US$3 trillion market capitalisation achievement.
The recovery has expanded to include the wider market and allowed many stocks to post impressive rebounds.
You may be wondering which company is next in line to hit a trillion dollars.
We have compiled a list of three US stocks that could be the next to achieve this momentous milestone.
Tesla (NASDAQ: TSLA)
Tesla is an electric vehicle and battery manufacturer that employs more than 100,000 employees around the world.
The company is headquartered in Texas and operates six vertically-integrated factories across three continents.
Tesla’s shares have rallied 60.6% in the past two months to US$269.79, taking its market capitalisation to US$845.4 billion.
Although shares are still below the all-time high of more than US$400 back in November 2021, there are signs that the electric car manufacturer can get there soon.
For the second quarter of 2023 (2Q 2023), the company produced 479,700 vehicles and delivered 466,140.
This was 85.5% and 83% higher than the same quarter a year ago, respectively.
Tesla also reported a 24% year-on-year rise in total revenue for 1Q 2023, although net profit shrank by 24% year on year because of lower gross margins.
The lower margins were due to price cuts in markets such as the US, China and the UK.
These price reductions, though, have sent sales volume to record levels.
This level of deliveries also surpassed analyst expectations of 445,000 cars.
Investors are also optimistic about Tesla’s plans to expand its new electric utility division in the UK to become an energy retailer
Meta Platforms (NASDAQ: META)
Meta Platforms is a social media company that runs various social media platforms such as Instagram and Facebook as well as the chat messaging program WhatsApp.
Shares of the social media giant have rallied close to 140% year-to-date to close at US$298.29, taking its market capitalisation to US$764.4 billion.
Meta Platforms’ management theme for 2023 is the “Year of Efficiency”, a term coined by CEO Mark Zuckerberg.
By May, the company had also concluded the last batch of a three-part round of layoffs that saw 10,000 jobs eliminated.
These job cuts came after more than 11,000 employees were asked to leave in November last year.
As a result, Meta Platforms will post a one-off restructuring charge of US$1 billion for 2023, but the business should see an improvement in margins as it now has a lower cost base.
In addition, the social media behemoth also released a new text-based platform called Threads, which saw 100 million sign-ups in just five days.
Threads is being promoted by executives as a more positive version of Twitter and could generate a new income stream for Meta Platforms in time to come.
Adobe Inc (NASDAQ: ADBE)
Adobe is a cloud software company well known for its portable document format (PDF).
The company also provides design, graphic and customer relationship management software on its platform through its Document and Experience Clouds services.
Adobe has surged nearly 50% year-to-date to US$504.74, taking its market capitalisation to US$230 billion.
Though this may still be some way off from a trillion dollars, Adobe has reported a record level of revenue for its fiscal 2023’s second quarter (2Q FY2023).
The first six months of fiscal 2023 also saw revenue increase by 9.5% year on year to US$9.5 billion with net profit coming in at US$2.5 billion.
Last September, Adobe also announced the US$20 billion acquisition of Figma, a web-first collaborative design platform.
This purchase will increase Adobe’s total addressable market by US$16.5 billion by 2025 and add more than US$400 million in annual revenue run-rate last year.
Meanwhile, the company has also incorporated generative AI capabilities in its Adobe Firefly, allowing it to power its Photoshop and Illustrator products.
These corporate developments should help to accelerate Adobe’s growth and propel its revenue skywards in the next few years.
Investors need to be patient, but it’s not inconceivable for the company to hit the trillion-dollar milestone eventually.
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Disclosure: Royston Yang owns shares of Apple, Adobe and Meta Platforms.
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