A new member has joined the trillion-dollar club…
Broadcom (AVGO) surged 24% on Friday after reporting impressive quarterly numbers that were driven by artificial intelligence (AI) related demand. In particular, revenue was up 51% year over year thanks to a 220% increase in AI-related revenue.
The stock closed Friday with a $1.05 trillion market valuation – putting it in the same league as some of the stock market elites.
The eight stocks that make up the trillion-dollar club are now being referred to as “BATMMAAN” – Broadcom, Apple (AAPL), Tesla (TSLA), Meta Platforms (META), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Nvidia (NVDA).
The first company to cross the trillion-dollar threshold was Apple on August 2, 2018. Today, the firm is worth more than $3.7 trillion. Both Microsoft and Nvidia also boast market caps greater than $3 trillion.
But I don’t think it’s too farfetched to believe there could be several companies worth more than $5 trillion by the end of this decade.
Which company will be the first to reach that milestone? And who is most likely to be the ninth addition to the trillion-dollar club? Well, let’s talk about it…
I believe Tesla has the best chance of becoming the largest company in the world over the next five years and achieving a $5-plus trillion valuation.
Its electric vehicle (EV) division will inevitably continue to grow. But its best long-term growth potential lies in its energy storage, robotaxi, and Optimus robotics divisions. Each segment alone could be worth at least $1 trillion.
All together, they combine to make up the most innovative company on Earth.
Innovation is key to the success of these BATMMAN stocks. Aside from being worth more than $1 trillion, these companies all have one other thing in common – AI.
Regular readers of Market Insights know the role that innovation plays in the stock market. It can make investors a lotof money – just like it did with the personal computer, the Internet, and the introduction of the smartphone.
AI will be no different.
Now, the answer to what firm will be the next to join the trillion-dollar club isn’t as obvious…
There isn’t another publicly-traded company knocking on that door currently. But I definitely expect this group to grow in the coming years. My favorite to achieve the feat is Eli Lilly (LLY). The large pharmaceutical is currently valued at $750 billion and dominating the weight-loss drug market.
Meanwhile, a few financials could also make a slow climb toward $1 trillion in the next few years. JPMorgan Chase (JPM) in particular may be next in line with its current market cap of $675 billion. And Visa (V) isn’t far behind – sitting near $610 billion.
That said, I believe smaller stocks will outperform their mega-cap peers over the next two to three years, so it’s more important than ever to ensure that your portfolio is diversified heading into the New Year and beyond.
You should have exposure to a variety of stocks in a variety of asset classes – ranging from the BATMMAAN stocks all the way down to a few small caps. That’s the best way to ensure success over the long term.
Here’s to the future,
Matt McCallEditor, Market Insights
The post The AI-Driven Trillion-Dollar Club Is Expanding – Here’s What’s Next appeared first on Centurion Publishing.
