Apple (AAPL -0.11%) is a beast, and nobody is going to topple it from the king of the market cap hill anytime soon. Apple's $2.8 billion valuation is dominant right now, but the class act of Cupertino probably won't be on top forever. Go out 13 years and it wouldn't be a surprise to see someone else in that spot. Who can it be?
I think Amazon (AMZN -2.14%), Tesla Motors (TSLA 2.57%), and Shopify (SHOP -2.29%) have fair shots to inherit the market cap crown from Apple. Let's see why each of these three already well-known companies can be the most valuable publicly traded company come 2035.
If you're like me, you lean a lot on Amazon these days. There's e-commerce, local grocery deliveries, namesake consumer electronics, and a growing slate of digital content. With its widely adopted AWS cloud platform, you're probably doing business with Amazon even when you don't realize that you're doing business with Amazon.
Amazon's a beast. Net sales rose 22% to $469.8 billion. Apple clocked in with just $365.8 billion on the top line for its fiscal 2021. Naturally, Amazon currently operates a lower-margin business. Apple deserves the better multiple. However, Amazon has been the more consistent grower. Apple's growth comes in spurts. It comes through with a fiscal year of double-digit growth in net sales, only to march in place the next two years. Really. Look up the pattern over the past decade. Amazon has a more attractive pattern. It has posted double-digit annual growth in net sales for the last two decades.
Apple has done a great job of building a high-margin services component to its business on top of its innovative premium-priced products. Apple should continue to do well over time, but it's also easy to see how Amazon's consistent big steps could make it more valuable by 2035.
This pick will be polarizing. Tesla Motors is already the fifth-most-valuable stock by market cap, and there's no shortage of bears stumped by how every larger automaker by sales volume is trading for less. I'm not one of those bears, and not just because the legacy car builders often have debt-saddled balance sheets and problematic pension obligations.
Tesla is different. Everyone is hopping on the electric vehicle trend now, but it will be hard to duplicate the proprietary Supercharger network. It will be hard to catch up to the tech at Tesla, where recalls are usually just over-the-air software updates. Speaking of updates, does your car get better every couple of months like a Tesla?
Apple turned hardware into a gusher of high-margin services, and Tesla has done the same. Tesla owners can pay $12,000 -- or $199 a month -- for full self-driving features that Elon Musk claims will become a reality later this year. Tesla's growth has been stunning, but the big mistake that bears make is assuming that the earnings potential of every Tesla that rolls off the line is the same as that of its slow-moving rivals' cars.
Let's go shopping for a third candidate to be king of the hill in 2035. Shopify is considerably smaller than Apple. It would have to appreciate 33-fold to catch up to the top dog. Shopify has also proven mortal lately, down 63% from last year's all-time high. You still don't want to bet against the fast-growing platform that is making e-commerce a reality for companies and entrepreneurs of all sizes.
Revenue rose 57% last year, including a 41% year-over-year top-line gain in the fourth-quarter results it posted this week. Guidance was a bit vague, leading investors to brace for slowing growth. However, Shopify's unique role is worth exploring. One can argue that Amazon also helps folks sell online through its giant marketplace, but Shopify provides professional stand-alone digital storefronts. Shopify also offers seamless integration into the growing number of channels to sell a product, unlike Amazon, which wants the business to go through its namesake destination.
The gig economy will continue to expand in the coming years, and Shopify will arm the creative and enterprising with instant online stores. Shopify's stock may be out of favor right now, but it has a long runway to keep thriving as a growth stock for a long time.