A lot can happen in a decade. In early 2013, ExxonMobil was the world's most valuable company, with a market cap of $446 billion. Fast-forward to 2023, and there's been a changing of the guard. Exxon's market cap is back near where it was 10 years ago, coming in at $423 billion. At the same time, Apple (AAPL -0.57%) now wears the crown, with a market cap of $2.7 trillion.
Over the coming decade, there will likely be a number of high-profile companies that join this exclusive club. While some of the members won't be a surprise, others could be.
Let's take a look at my predictions for the five companies that will be worth $2 trillion by 2033.
Image source: Getty Images.
The shoo-ins
As I mentioned above, Apple already has a market cap of $2.7 trillion. There's little question that the stock could shed 25% of its value. In fact, as recently as January, shares were down 31% from their peak. However, this ignores any growth that Apple will achieve over the coming decade -- and if history is any indication, it could be significant. Driven by resilient and growing demand for the iPhone and the accompanying services, Apple boasts more than 1 billion active iPhones. Plus, those numbers keep growing, fueling its financial results.
Since 2013, Apple has increased its revenue by 168% and its diluted earnings per share (EPS) by 468%. This has, in turn, fueled stock-price gains of more than 1,000%. Apple currently trades for roughly 7 times sales. If it maintains its valuation, it would take just modest revenue growth to help the tech titan maintain its charter membership in the $2 trillion club.
The only other member of the club (as of this writing) is Microsoft (MSFT -1.84%), with a market cap of $2.3 trillion, and its prospects of retaining its membership are equally compelling. To be clear, the company lost about a third of its value during the recent downturn, but the resilience of its suite of products helped spark a rebound.
It's difficult to imagine a world without Windows, not to mention Word, Excel, or Outlook. This makes them -- and other Microsoft products -- staples in the business arena. Plus, the company's Azure cloud computing segment is the second-largest cloud infrastructure provider, partially due to its tight integration with Microsoft's expansive product portfolio.
Over the past decade, the company has increased its revenue by more than 300% and its EPS by 166%, driving its stock price up by more than 800%. The resilience of Microsoft's revenue and the mission-critical nature of its offerings has pushed its valuation to 11 times sales. At its current level of low-double-digit revenue growth, it's highly likely that Microsoft will still be worth more than $2 trillion by 2033, even if there's a bit of multiple compression.
The contenders
Though it's fallen on hard times, Alphabet (GOOGL 0.35%) (GOOG 0.37%) was a former member of the $2 trillion club and will likely rejoin its ranks in short order. Soon after reaching its zenith in November 2021, the emergence of the bear market stole Alphabet's thunder, driving the stock price down as much as 45% over the coming year. The culprit? Demand for digital advertising plummeted as businesses cut back on spending to shore up their financial positions and ride out the downturn.
There's no evidence that the decrease in demand for advertising is permanent, and history suggests Alphabet will rebound with the broader economy. What's more, Google Cloud is the fastest-growing of the cloud infrastructure providers, riding the digital transformation to new heights. Over the preceding 10 years, Alphabet increased revenue by 432% and EPS by 390%, fueling stock-price gains of over 400%. With its current market cap of $1.5 trillion, it will only take a return to low-double-digit growth at its current valuation of 5.4 times sales for the Google parent to regain its membership in the $2 trillion club.
Amazon (AMZN -1.14%) was on the verge of joining its big tech rivals in the $2 trillion club, reaching $1.99 trillion in November 2021 before being ravaged by the bear market. The ensuing macroeconomic headwinds have stifled consumer spending -- and with it much of the company's growth, but this, too, shall pass. Amazon retains its title as the world's largest e-commerce platform, which will no doubt fuel future growth.
But the return of consumer spending is just one catalyst to help drive its rebound. After nearly two decades, Amazon Web Services remains the largest cloud infrastructure provider, with a market share more than Microsoft Azure and Google Cloud combined, making it the name to beat. The company is also a rising star in the field of digital advertising, with captive audiences on its digital retail site, as well as FreeVee, its ad-supported streaming channel.
A return to form will boost Amazon's chances of finally joining the $2 trillion club. Over the past decade, Amazon grew revenue by nearly 650% and EPS by more than 1,100%. The stock currently trades at just 2.2 times sales, so if the company returns to mid-double-digit growth -- with no change in its valuation -- Amazon could easily eclipse that market cap.
The long shot
As I've illustrated above, it won't take much to push Amazon and Alphabet above $2 trillion -- and even less for Microsoft and Apple to stay there. The math is slightly different -- but no less likely -- for Nvidia (NVDA 0.76%). The company pioneered the graphics processing unit (GPU) and is the top choice of serious and novice gamers alike. Nvidia has since pivoted its technology to play a key role in cloud computing and artificial intelligence (AI). While it's the most volatile of these five stocks -- the product of its lofty valuation -- Nvidia has catalysts aplenty to help it achieve a $2 trillion market cap.
Nvidia is the undisputed leader in the discrete desktop GPU market with a dominant 88% share. It's also a key player in the cloud computing market, partnering with all the major cloud providers. That's not to mention the accelerating adoption of AI, another area where Nvidia is a standout. While estimates vary, Nvidia controls as much as 95% of the market for machine-learning chips, according to data provided by New Street Research.
Yet these accolades didn't stop Nvidia from being hit hard during the tech meltdown. At one point, the stock had lost more than two-thirds of its value. However, its fundamentals are sound. Over the preceding 10 years, Nvidia grew revenue by 536%, pushing its EPS up by more than 1,300%. This drove stock-price gains of 7,850%. To be clear, Nvidia's stock trades for a lofty 27 times sales, near the peak of its historical valuation range.
With its current market cap of $722 billion, the stock would have to rise by 11% annually to reach a $2 trillion market cap by 2033. Given its historical growth rate, that shouldn't be too difficult. However, there's always the potential that Nvidia suffers from multiple compression. For example, if investors were less generous regarding its growth prospects, and only valued Nvidia at 10 times sales, its market cap would drop to roughly $270 billion. From that level, it would have to grow its revenue by 23% annually to reach $2 trillion by 2033. Still very doable given its history, but you get the point.
