Is Any Company Worth $1 Trillion?

A $1 trillion market capitalization seemed like an unattainable benchmark just 30 years ago, yet now it’s not a matter of who but how many companies have eclipsed it. The biggest names in the technology industry have gotten bigger this year, not least because of the buzz around artificial intelligence, and that has pushed some of them well past the trillion-dollar threshold.

Microsoft (NASDAQ: MSFT) leads the pack as the largest company in the world, with an astounding $3.02 trillion market capitalization. Once known for Windows and Office, which are still quite popular, the company’s focus has shifted to cloud services and AI. The metamorphosis has fueled MSFT’s 220% 5-year run and it’s possible the best is yet to come.

The trillion-dollar club doesn’t end with Microsoft but it also isn’t a static list. Market capitalization is the measure of the total value of a company’s outstanding shares. As share prices fall, a company will find itself on the outside of the club just as rapidly as it got in.

That’s the case for Tesla, which crossed the trillion-dollar mark in 2022. Unfortunately for Musk and company, a series of unpopular moves and a changing electric vehicle market sent the stock price plummeting. Tesla now has a $567.7 billion market cap.

So which company will be the next to reach $1 trillion? And which ones are set to fall out of the illustrious grouping?

Is Any Company Worth $1 Trillion?

Apple, Amazon, Microsoft, and Nvidia are all companies with trillion dollar market capitalizations or higher. So what are the five largest companies by market cap?

After Microsoft at the top of the list comes Apple (NASDAQ: AAPL). The Cupertino giant hasn’t been a favorite with investors lately, even after its most recent pop, due to slumping iPhone sales and the lack of any tangible AI integrations, though they are promised.

Nonetheless, Steve Jobs’s firm still managed to hold onto a market valuation of $2.83 trillion. Apple’s latest earnings included an enormous share buyback plan and the company hinted at increased AI integration across its product and services suite. Those stimulative measures will provide support to Apple’s share price.

Nvidia (NASDAQ: NVDA) has surged into the top three with a 222% 1-year return. The semiconductor company has seen an over 2,000% rise in share price over the last five years on the strength of its chipmaking business. Nvidia’s products are viewed as an integral part of the AI-powered future.

After Nvidia comes Google owner Alphabet (NASDAQ: GOOG). Though Google has ties to AI, the company hasn’t enjoyed the meteoric heights of Nvidia or the solid earnings results of Microsoft. Still, a 60.6% 12-month rise has left the company with a $2.08 trillion valuation.

The only non-tech company with a trillion-dollar valuation is Saudi Arabian Oil Company, with a $1.93 trillion market capitalization. The company is owned by the Saudi Arabian government and is the largest oil producer in the world.

What Other Companies Have A $1 Trillion Valuation?

Returning to the technology titans theme, Amazon (NASDAQ: AMZN) is the sixth largest company in the world with a $1.93 trillion market capitalization. The e-commerce company has been a mainstay at the top of the largest stocks by market cap list for some time and AMZN share price has returned more than 79% over the past year.

The leader in cloud computing services is facing increased competition from Alphabet in particular but it’s not sufficient to succumb to the under $1 trillion market cap grouping.

Rounding out the list of $1 trillion companies is Meta (NASDAQ: META). Though Facebook’s parent firm has a valuation of $1.15 trillion, the stock’s recent plunge put the company’s trillion-dollar market capitalization in jeopardy.

Meta investors sold with abandon following the most recent earnings report, where the company announced it would spend heavily to invest in infrastructure. Investors had also been looking for a more positive AI impact on Meta’s earnings.

What Companies Are Almost $1 Trillion Companies?

Outside of the top seven companies is Berkshire Hathaway, the holding company run by Warren Buffett.

With an $862 billion market cap, Berkshire still has a way to go to reach the 13-figure club. Even though Buffett made big news by announcing Berkshire’s growth was likely to stagnate from here, it may not be wise to count the Sage of Omaha out just yet. The stock is up 91.8% in the past five years.

After Berkshire is Eli Lilly, and the pharmaceutical giant has a valuation of $699 billion. The success of weight loss drugs has been a key growth driver in recent years. Specifically, drugs that solve obesity and diabetes problems have resonated with consumers.

Rounding out the number 10 and 11 spots are two AI chipmakers who have surged to prominence over the past few years, though not as dramatically as Nvidia. Taiwan Semiconductor Manufacturing Company has a $640.7 billion valuation, followed by Broadcom with $592.3 billion.

What Company Will Reach $1 Trillion Next?

Though it’s technically part of the Magnificent Seven, Tesla actually comes in at 12 on the ranking of companies by market capitalization. The inclusion of Elon Musk’s firm with other giant technology enterprises was not so much based on profits historically as it was the potential for the firm to lead the world in AI.

Unfortunately for Tesla, the company hasn’t been able to live up to the promise of fully autonomous cars, yet. The controversial purchase of the Twitter, now X, platform, a slower EV market, and Elon Musk’s penchant for making polarizing statements have weighed on TSLA’s valuation. It doesn’t appear the company will rejoin its magnificent peers anytime soon.

Berkshire is next in line and it’s an incredibly well-run holding company. While a stable and solid investment, it may take a little longer to reach $1 billion. The same goes for pharmaceutical giant Eli Lilly.

Though the AI craze has finally encountered some headwinds, there is still plenty of reason to believe it can be stirred up again. Even though chipmakers Taiwan Semiconductor and Broadcom are quite a ways from $1 trillion market capitalizations, investors appetites for artificial intelligence might very well catalyze those two companies into the trillion-dollar club.

Will Any Company Fall Below $1 Trillion?

Tesla is certainly proof that no firm can count on an elevated valuation for long if the profits don’t support the buzz.

Teetering on the edge of the threshold is Meta, which has ridden the AI wave to a 93.5% one-year stock increase. Investors didn’t like what they saw from the latest earnings, but Meta will likely hold onto its valuation barring any other curveballs.

Aside from Meta, the other top stocks seem secure in their positions as $1 trillion companies. Even though the valuations of some tech companies are sky-high, as evident by Nvidia’s 74.4 price-to-earnings value, investors appetites to buy what is likely to be transformative has not been quashed.

That’s one more reason why Taiwan Semiconductor and Broadcom may well be the next two trillion-dollar companies.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.