Just how much is $5 trillion? If you could stack 5 trillion $1 bills on top of each other, they'd go all the way to the moon and then some. We're talking about a lot of money.
Right now, no company on the planet has a market cap of anywhere close to $5 trillion. However, it's only a matter of time before the threshold is exceeded. I'm not sure exactly when it will happen. But I predict that four stocks will be the first to top $5 trillion.
1. Apple
My take is that Apple (AAPL +3.26%) is practically a no-brainer to be among the initial stocks to reach the $5 trillion mark. The tech giant is currently more than halfway there with a market cap of almost $2.8 trillion.
NASDAQ: AAPL
Key Data Points
How will Apple add another $2.2 trillion or so to its valuation? I think the company has three primary paths:
- Higher iPhone sales
- Higher services revenue
- New products and services
Achieving higher iPhone sales shouldn't be too terribly difficult, especially with the increased adoption of 5G networks. Higher services revenue won't be hard to pull off, either.
I'm most intrigued by what new products and services Apple will introduce in the coming years. A mixed-reality headset and expansion into health insurance are already anticipated, but the company could have a few surprises along the way, too.
2. Microsoft
Microsoft (MSFT +1.62%) isn't all that far behind Apple (relatively speaking, anyway). Its market cap currently is a little under $2.4 trillion.
NASDAQ: MSFT
Key Data Points
You won't find many hot technology areas where Microsoft doesn't already have a significant presence. Artificial intelligence (AI), augmented reality (AR), cloud hosting, and quantum computing are just the tip of the iceberg.
I predict that all of these will be much bigger markets over the next decade. And I fully expect that Microsoft will continue to be a leader in all of them.
3. Alphabet
Much of what I just said about Microsoft also applies to Alphabet (GOOG +0.27%) (GOOGL +0.20%). The Google parent is a pioneer in multiple game-changing technologies. Its market cap currently stands at nearly $1.6 trillion.
NASDAQ: GOOGL
Key Data Points
Alphabet's Google Cloud should be a huge winner from the AI boom as companies seek to develop AI apps. However, I think that quantum computing could be the less-hyped field that really catapults Alphabet to the next level.
Google proclaimed in 2019 that it was the first to achieve quantum supremacy -- solving a problem that a classical computer couldn't solve within a practical timeframe. Earlier this year, the company made another major advance in quantum computing by reducing processing errors. If Alphabet keeps it up, it could wind up as the dominant player in quantum computing.
4. Amazon
It's pretty much the same song but a different verse with Amazon (AMZN +1.21%). Like Microsoft and Alphabet, Amazon is a leader in several hot tech areas. The e-commerce and cloud giant does have a longer road to get to $5 trillion, though, with its market cap currently hovering around $1.2 trillion.
Amazon Web Services (AWS) is practically a sure bet to deliver tremendous growth with the proliferation of AI. My hunch is that AWS by itself could propel Amazon to the $5 trillion threshold.
Don't overlook Amazon's e-commerce business, though. The company's logistics capabilities are unsurpassed -- and e-commerce penetration still remains quite low.
In what order?
I listed these four stocks by descending market cap. However, that doesn't mean I necessarily think that's the order they'll reach a market cap of $5 trillion. A lot could happen over the next few years that might cause some jockeying of positions between these companies.
I also acknowledge that it's possible that other companies could edge out one or more of these tech stocks. For example, Saudi Arabian Oil Company (often referred to as Saudi Aramco) has a current market cap of over $2 trillion.
However, I'm sticking with my prediction that Apple, Microsoft, Alphabet, and Amazon will be the first four to top $5 trillion. And I've put my money where my mouth is: I personally own all four stocks.
