The Next Stock to Hit $1,000?

Google's breaking $1,000 per share last week was a significant, albeit meaningless, event. "Did you see Google's stock?" a friend, one with little interest in the market, asked me Saturday.

Investors, aiming to buy a piece of the underlying business, shouldn't concern themselves too much with the actual number of dollars required to buy a share. As long as their investment is working out, nominal value is generally of little consequence. Yet an investment in Google has worked out -- the move above $1,000 came on news of a strong earnings report, and shares are up more than 40% this year.

Which stock will be the next to join the $1,000 club? MasterCard (MA 0.15%), Netflix (NFLX -9.09%), and Amazon (AMZN -2.56%) all look like excellent candidates.

MasterCard is nearly there already
MasterCard is an easy pick. Now trading at more than $700, it's one of the closest stocks to $1,000 in the entire market -- just a 40% move up would get it there. With a market cap near $85 billion, a 40% rally may seem to be asking a lot, but it's not unreasonable.

MasterCard remains a great play on electronic payments. To many, this might seem like a market that's already matured -- but it hasn't. Worldwide, only around 15% of payments are handled electronically. In time, this will likely increase, so MasterCard still has room to grow. Most recently, the company has been expanding into Myanmar and South Africa, inking a deal with one of South Africa's largest banks. There's some promise in the U.S., too. Last month, economic data showed consumer spending ticking up -- the fourth consecutive monthly increase.

The one concern investors may have is valuation. With a price-to-earnings ratio near 30, it's a more expensive stock than its larger rival, Visa. Still, if MasterCard grows to become as big as Visa is now (and assuming no stock splits), shares will likely go over $1,000.

Reed Hastings has raised the bar yet again
After Monday's impressive earnings beat, Netflix is trading near $400. To get to $1,000, shares would have to double and then some -- though Netflix is no stranger to doubling, having done so nearly three times in the last two years.

But to do that, Netflix will have to add subscribers -- a lot of them. Previously, Netflix's CEO, Reed Hastings, put the company's goal at 60 million to 90 million U.S. subscribers. On Monday, he seemed to put a target on Netflix's global expansion, remarking that the company still had a "long way to go to match HBO's 114 million" global subscriber count.

Netflix's strategy, focused on original content, appears to be working well. Despite its lack of star power, Orange Is the New Black has become Netflix's most viewed original series, while House of Cards won three Emmys this year in its very first season -- beating out programs from more established networks, including HBO.

Netflix has surpassed HBO domestically: Its 31 million U.S. subscriber figure is higher than HBO's roughly 29 million. If it can surpass HBO worldwide as it did in the U.S., $1,000 may not be unreasonable.

Could Amazon become one of the most valuable companies in the world?
To get to $1,000, Amazon shares would have to triple. With its current market cap -- roughly $150 billion -- a threefold increase would make Amazon one of the most valuable companies in the world. It might take some time to get there, but Amazon is definitely on the right track.

E-commerce is still, on a relative basis, pretty small, representing less than 10% of retail sales in the U.S. Amazon dominates that space, but it's a big fish in a small pond -- according to the National Retail Federation, based on 2012 retail sales, Amazon is only America's 11th largest retailer. Of the 10 companies that outrank it, many are large grocers (Wal-Mart, Kroger, Safeway), a market Amazon is just starting to get into.

But Amazon isn't just a play on e-commerce -- it's also an enormous cloud computing play. Amazon Web Services is the leading infrastructure as a service (IaaS) provider; according to research firm Gartner, Amazon Web Services is larger than its 14 biggest rivals combined. Netflix, despite competing with Amazon Prime Video, uses AWS. All in all, Amazon's cloud business could be worth $24 billion -- and it's growing.

Joining the $1,000 club
Certainly, investors shouldn't pick stocks simply on the basis of their nominal value. Still, a move above $1,000 obviously indicates that a business is doing well.

In the case of MasterCard, Netflix, and Amazon, all appear to have strong underlying businesses with a lot of room for growth. Bears may point out that all three appear to be overvalued -- and, admittedly, they may be. Nevertheless, I think the next stock to break the $1,000 barrier will come from this list.