One trillion is an enormous number. Indeed, just seeing it written out is jarring: 1,000,000,000,000. So it's no surprise that $1 trillion market caps are a new stock market phenomenon.
The first company to clear the hurdle was Apple in 2018. Currently, there are five American stocks with a market cap of $1 trillion or more: Apple, Microsoft, Alphabet, Amazon, and Nvidia.
But several other companies are knocking on the door. Which ones will enter the exclusive $1 trillion club in 2024? Let's have a look.
Image source: Getty Images.
Meta Platforms
For Meta Platforms (META +0.22%), 2023 proved to be quite the bounce-back year. The stock has flown somewhat under the radar even though it has ripped higher by 170% year to date. That's second only to Nvidia's 219% among Nasdaq 100 components.
NASDAQ: META
Key Data Points
Meta has added $542 billion in market cap since January, bringing its current total to roughly $858 billion.
META market cap data by YCharts.
To cross the $1 trillion line again (Meta briefly did so before in 2021), the company will need to add about $150 billion in market cap next year -- roughly an 18% gain.
That looks pretty reasonable, given its stellar fundamentals. Revenue grew around 23%, and its operating margin stood at 41% as of the company's most recent quarter (the three months ending on Sept. 30). Moreover, analysts expect sales to rise a further 13% in 2024 to $138 billion.
In short, Meta is a hop, skip, and a jump away from rejoining the $1 trillion club. Investors should take notice.
Berkshire Hathaway
In contrast to Meta, Berkshire Hathaway's (BRK.B 1.09%) market cap has grown only 14% in 2023. And that's to be expected. The company's entire approach promotes slow, steady, long-term growth.
BRK.B market cap data by YCharts.
Nevertheless, the company's massive $779 billion market cap makes it a real contender to crack the $1 trillion mark for the first time next year. That would require a somewhat un-Berkshire-like 25% jump in market cap in 2024. However, it is possible given its enormous holdings in Apple.
And, as investors have known for a long time, things are changing at Berkshire. Charlie Munger passed away in November, and Warren Buffett, age 93, has passed significant responsibilities on to his successor, Greg Abel.
So 2024 will prove to be a watershed year for Berkshire, if for no other reason than it will mark the first year without Munger. If the company tops $1 trillion in market cap, it could prove to be historic in more ways than one.
Tesla
Lastly, it's time to talk Tesla (TSLA +0.91%) -- by far my spiciest pick to top $1 trillion next year. Like Meta, it is a company that has cleared the $1 trillion hurdle before and is aiming to regain its place.
TSLA market cap data by YCharts.
This year, Tesla's market cap has swung wildly from a low of $342 billion to a high of $931 billion. And not surprisingly. Tesla remains a polarizing stock for several reasons:
- Elon Musk's statements.
- The state of the electric vehicle (EV) market.
- Tesla's declining gross margins.
Nevertheless, for investors, it's essential to filter out the noise and focus on the big picture:
- Will Musk deliver returns for Tesla shareholders?
- Will EVs continue to gain market share from petroleum-powered vehicles?
- Can Tesla halt the slide in its automotive gross margins through increased production efficiencies?
I think the answer to all three questions is yes.
And in that case, I believe Tesla can more than achieve the 25% gain necessary to increase its market cap to $1 trillion.
