Berkshire Hathaway is an enormous company. With a market capitalization topping $717 billion, Berkshire Hathaway ranks fifth on the list of largest American companies by market cap.
And while Berkshire has been a staple of the top 10 dating back to 2009, many companies have overtaken Berkshire during the last 14 years.
Let's have a look at three companies I think are poised to surpass Berkshire over the next seven years: Tesla (TSLA 12.23%), Moderna (MRNA 1.31%), and Nvidia (NVDA -3.17%).
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1. Tesla
First things first: Tesla has surpassed Berkshire Hathaway's market cap once before. Between 2020 and 2022, Tesla's market cap exceeded Berkshire's. However, at the moment, Berkshire is worth roughly $200 billion more than Tesla.
Yet, I think Tesla can stage a comeback. The company is ramping up production and slashing prices, all part of its effort to become the world's largest automaker. Analysts expect Tesla to produce around 1.8 million vehicles in 2023 and 2.35 million in 2024. If that happens, Tesla could crack the top 10 in global auto sales by 2024.
What's more, Tesla has several exciting new models and features on the horizon. The first Tesla Semis rolled off the line in late 2022, and production of the Cybertruck is set to start in the coming months. Similarly, some analysts think Tesla's autonomous driving technology could be a game changer, leading to a thriving robotaxi business.
At any rate, I believe Tesla has enough gas in the tank to easily make up the gap on Berkshire and surpass it by 2030.
2. Moderna
For my second pick, I'm swinging for the fences with a long shot to surpass Berkshire Hathaway. Moderna is a biotech company that most people know for its COVID-19 vaccine.
However, the company's messenger RNA therapeutics and vaccines can potentially be used to treat other diseases. In fact, Moderna's chief medical officer, Dr. Paul Burton, recently noted that the company aims to produce vaccines targeting cancer, heart disease, and other serious diseases by 2030. If that prediction comes true, expect Moderna shares to skyrocket.
And Moderna shares will need to skyrocket if the company's market cap is going to exceed Berkshire Hathaway's. Today, Moderna has a market cap of $52.8 billion, ranking No. 304 among American companies. To catch Berkshire, Moderna would need to grow 14 times. That's a big ask, but effective treatments for life-threatening diseases like cancer and heart disease would be a game changer, not just for the company -- but for the world.
However, at present, those treatments remain out of reach, meaning Moderna will have to rely on other products to drive its revenue and earnings. Financially, the company remains healthy, with $18.9 billion in revenue and $9.4 billion in operating income over the last 12 months. Yet, with sales of its COVID vaccine waning, analysts expect revenue to decline by 60% in 2023 and a further 15% in 2024.
Needless to say, owning Moderna isn't for everyone. Like a power hitter at the plate, Moderna is swinging for the fences. Sometimes those hitters blast it out of the park; other times, they strike out.
3. Nvidia
My final pick is another company that also surpassed Berkshire Hathaway's market cap in the not-so-distant past: Nvidia.
The maker of advanced graphics and mobile processors sported a market cap of more than $800 billion as recently as 2021. And, as of this writing, Nvidia's $658 billion market cap trails Berkshire by "only" $59 billion.
How could Nvidia get over the hump? The growing importance of artificial intelligence (AI) is likely to do it. Nvidia's processors are sought out for use in the supercomputers behind much of the world's cutting-edge AI. Moreover, Nvidia's automotive unit boasts impressive momentum, bolstered by automakers keen to perfect reliable autonomous driving.
Yet, if Nvidia has an Achilles' heel, it's the company's rich valuation. With a price-to-earnings multiple above 150, investors must pay up for Nvidia's future growth. However, there's simply too much to like about Nvidia's growth prospects to ignore. Investors willing to buy and hold can still build a position in the name -- as long as they're willing to ride out the inevitable volatility that comes with this tech giant.
