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These top stocks could Join Apple, Microsoft, and Nvidia in the $3 Trillion Club
View Date:2024-12-24 01:35:26
The U.S. Senate is sometimes called "the most exclusive club." However, I can think of a club that's much more exclusive than the legislative body, which has 100 members. It's the $3 trillion club.
Only three companies in the world boast market caps of $3 trillion or more: Apple, Microsoft, and Nvidia. But this club might 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 Google parent's market cap currently stands at around $2.3 trillion. At the rate the stock is climbing, it's not out of the question that 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 the rise of generative AI presents 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 overviews have increased search usage and user satisfaction with search results.
Google Cloud should enjoy a strong tailwind from AI for years to come. The unit's sales jumped 28% year over year in Q1 with operating income soaring 371%. Google Cloud is especially popular with generative AI start-ups, with more than 60% using its cloud service.
YouTube is another key growth driver for the company. It's the leader in U.S. streaming with viewers watching over 1 billion hours of content daily. 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) isn't too far behind Alphabet, with a market cap hovering around $2 trillion. I fully expect the e-commerce and cloud services giant will also take a spot 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 years ahead thanks to the demand for building and deploying AI models. AWS is the leader in the cloud services market. I suspect it will stay on top because of the appeal of new products such as 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 to boost profitability. As Amazon increases delivery speed further, its e-commerce revenue and profits should grow as customers shop online more frequently.
Advertising is also an important growth engine for Amazon. In Q1, advertising sales soared 24% year over year on a constant-currency basis. This growth could increase in the future as advertising on Prime Video 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 the market caps of Alphabet and Amazon. However, I think it's only a matter of time before Meta reaches the $3 trillion threshold.
The company is an advertising juggernaut. Its apps, including Facebook, Instagram, Messenger, and WhatsApp, reach more than 3.2 billion people across the world every day. Advertisers can' ignore such a massive audience.
Meta's efforts to more efficiently monetize its products, especially Reels, are paying off handsomely. Profits more than doubled year over year in Q1. The company continues to get better and better at showing ads to the right person at the right time.
AI presents a major growth opportunity for Meta. In particular, CEO Mark Zuckerberg believes that AI-powered business messaging will be the "next major pillar" 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'd be right, in my view.
All three stocks have tremendous growth prospects. The growth drivers already mentioned don't even tell the full story. For example, robotaxis could be huge opportunities for Alphabet's Waymo and Amazon's Zoox units. Meta could be a bigger winner in virtual reality and the metaverse. I think Alphabet, Amazon, and Meta are great stocks to buy and hold.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to 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 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
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