There aren’t many US companies currently with a market capitalization of more than $1 trillion. So far, the illustrious club includes the largest US tech giants. However, companies from the financial sector could possibly also join them in the coming years.
• Only five U.S. companies with market capitalizations over $1 trillion
• Apple was first company to reach the milestone
• Three financial companies could follow in the coming years
In 2018, Apple became the first company to break the $1 trillion mark with its market capitalization. So far, only four US companies have been able to follow the iGroup into this trillion-dollar club. This means that only five US companies currently have a market capitalization of more than one trillion US dollars: Apple with 2.82 trillion US dollars, Microsoft with 2.89 trillion US dollars, Alphabet with 1.78 trillion US dollars, Amazon with $1.57 trillion and NVIDIA with $1.38 trillion (as of January 18, 2024).
However, companies from the financial sector could also join the tech giants in the coming years. As The Motley Fool reports, there are three U.S. financial companies that could reach this milestone in the next decade – or even sooner.
Berkshire Hathaway shares
Star investor Warren Buffett’s investment vehicle Berkshire Hathaway, which also invests in the tech giants Apple and Amazon, among others, has been able to significantly increase its portfolio value in recent years. At the end of September 2023, the Buffett portfolio was worth around $313.26 billion.
Berkshire Hathaway’s market capitalization has increased about 10.5 percent annually over the past 10 years from $292 billion, according to The Motley Fool. Berkshire Hathaway shares are currently trading at $362.20 and the conglomerate’s market capitalization is $781.83 billion (as of January 18, 2024). For Berkshire Hathaway to reach the $1 trillion mark in the next decade, the company’s market capitalization would need to grow 2.3 percent annually, according to The Motley Fool.
However, with the investment skills of Warren Buffett and his team at Berkshire Hathaway and the investment vehicle’s cash flow-positive businesses, this goal should be easy for Berkshire, The Motley Fool is convinced.
Visa stock
Another financial industry company that could reach the $1 trillion milestone is credit card provider Visa. Visa has had six decades to build its merchant and customer base, according to The Motley Fool, and now dominates the payments sector thanks to powerful network effects that create an economic barrier around the company’s business.
In the 2022/23 financial year, the company recorded significantly more sales and profits. Revenues rose compared to the previous year by eleven percent to almost 33 billion US dollars, while profits were around 17 billion US dollars, 15 percent above the previous year’s value.
Visa shares are currently trading at $268.13. With a current market value of $535.95 billion, the company is one of the most valuable financial groups in the world (as of January 18, 2024). Within ten years, Visa’s market capitalization increased by 14.3 percent annually from $140 billion. According to The Motley Fool, in order to reach a market capitalization of one trillion US dollars by 2034, it would have to grow by 6.5 percent annually, which would mean significantly stronger growth than Berkshire Hathaway. However, according to a report from Grand View Research, the global payment processing market could also grow by 14.5 percent annually through 2030 – and Visa is perfectly positioned to grow with it, according to The Motley Fool, thanks to its moat.
JPMorgan stock
The first bank to break the $1 trillion mark with its market capitalization could be the major US bank JPMorgan. JPMorgan is a well-run bank – under the leadership of Jamie Dimon, one of the best-run banks in the USA, reports The Motley Fool. Dimon steered the bank through the recession, the low interest rate phase, the pandemic and the recent phase of high inflation and rising interest rates. In addition, JPMorgan has a solid balance sheet and is prudent when it comes to risk management.
Over the past decade, JPMorgan’s market capitalization of $220 billion has grown at an average annual rate of 8.5 percent, according to The Motley Fool. JPMorgan shares are currently listed on the NYSE at $167.42 and have a market capitalization of $483.06 billion (as of January 18, 2024). For JPMorgan to break the $1 trillion mark, the U.S. bank’s market capitalization would have to grow 7.2 percent annually over the next decade, according to The Motley Fool.
Editorial team finanzen.net
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