As of the closing bell on Oct. 10, there were more than 5,500 publicly traded stocks for investors to choose from on major U.S. exchanges. Among these 5,500-plus companies is an elite group of 10 businesses that have joined the trillion-dollar club.
This top-tier of outperformers includes all members of the "Magnificent Seven" -- Nvidia (NVDA 2.83%), Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla (TSLA 5.46%) -- along with Broadcom, Taiwan Semiconductor Manufacturing, and Berkshire Hathaway.
Image source: Getty Images.
These are Wall Street's most-influential businesses, with each company possessing some form of competitive edge or sustainable moat in one or more industries.
But in spite of the long-term outperformance of these trillion-dollar stocks, Wall Street analyst's views of these companies can vary quite a bit. On one hand, a price target hike late last week for Wall Street's largest publicly traded company portends up to 64% additional upside. Meanwhile, a recently reiterated price target from another analyst calls for up to 95% downside for one of Wall Street's elite trillion-dollar stocks.
Nvidia can ride the artificial intelligence (AI) wave to a $7.3 trillion market cap
Perhaps it's only fitting that the trillion-dollar stock one Wall Street analyst is highest on is the leader of the artificial intelligence (AI) revolution, Nvidia.
Despite Nvidia adding well over $4 trillion in market cap since the end of 2022, analyst C.J. Muse of Cantor Fitzgerald upped his and his firm's price target on the company to $300 per share from $240. If accurate, it would represent 64% additional upside, compared to where shares closed on Oct. 10, and afford Nvidia a $7.3 trillion valuation.
Muse views Nvidia as a top AI infrastructure pick and shrugs off the notion that a bubble is brewing in the AI arena. His research note lays out a scenario where Nvidia controls at least 75% of the AI-accelerator market, with a handful of hyperscalers providing a very safe demand floor. Muse also pointed to Nvidia's newly announced partnership with privately held OpenAI as the perfect example of a hyperscaler that should keep demand stratospheric for Nvidia's AI hardware.
Beyond Muse's commentary and price target hike, Nvidia CEO Jensen Huang is ensuring that his company maintains its competitive technological advantage. Huang is targeting the release of a new advanced AI graphics processing unit (GPU) each year, with Vera Rubin and Vera Rubin Ultra expected to debut in the latter-halves of 2026 and 2027, respectively. No external competitors have come particularly close to matching the compute capabilities of Nvidia's AI-accelerating hardware.
Something else that can't be overlooked is Nvidia's unsung hero: its CUDA software platform. This is the toolkit developers rely on to maximize the potential of their Nvidia hardware, which includes the building and training of large language models. CUDA has been a hook that's latched onto existing clients and kept them firmly within Nvidia's ecosystem of products and services.
But while analysts almost universally expect Nvidia stock to head higher, history offers a different perspective. Though Muse doesn't perceive there to be an AI bubble brewing, there hasn't been a single game-changing technology for more than three decades that's avoided an eventual early stage bubble-bursting event.
For decades, it's been a virtual guarantee for investors to overhype the early innings adoption and utility of a next-big-thing innovation, such as artificial intelligence. Most businesses aren't yet generating a positive return on their AI investments and/or haven't figured out how to optimize their AI solutions. These are all historical markers of a bubble.
The other prominent issue for Nvidia is that many of its top customers by net sales, which includes most of the Mag-7 companies, are internally developing AI chips to use in their data centers. Even with these AI-GPUs being inferior to Nvidia's, in terms of compute abilities, they're considerably cheaper and more readily available (i.e., not back-ordered). This is recipe for Nvidia to lose out on future data center real estate, as well as for AI-GPU scarcity to wane.
Image source: Tesla.
North America's leading electric-vehicle manufacturer is headed for a breakdown
But optimism isn't universal for Wall Street's 10 trillion-dollar stocks. This is especially evident for electric-vehicle (EV) maker Tesla.
Analyst Gordon Johnson of GLJ Research, who's a noted longtime bear on Tesla, recently reiterated his uniquely specific price target of $19.05 per share. Johnson's price target is derived by placing an earnings multiple of 15 on Tesla and working backwards with a 9% discount rate.
In some of Johnson's more recent commentary, he's highlighted Tesla's structural disadvantages and its valuation as reasons the company's stock could plummet.
With regard to the former, Johnson has pointed to most Mag-7 members generating the bulk of their sales from higher-margin software. Meanwhile, Tesla brings in a lot of its net sales from lower-margin hardware (selling EVs). Companies powered by high-margin software possess substantial pricing power, whereas Tesla's hardware pricing power has been challenged in recent years. It's slashed the selling price on its fleet of EVs more than a half-dozen times over the last three years, which has had a noticeably negative effect on its vehicle margin.
Johnson has also been rightly critical of Tesla's valuation. Whereas most auto stocks trade at high-single-digit price-to-earnings (P/E) multiples, Tesla is valued at 242 times forecast earnings per share (EPS) in 2025. What makes this multiple even more egregious is that Tesla's sales are expected to decline by 4% this year, and its EPS has been sloping downward for three years.
Though it's a subject Johnson has previously touched on, the biggest risk for Tesla stock just might be its CEO, Elon Musk. Despite expanding Tesla into energy generation and storage and bringing a handful of new EVs to market, Tesla's chief has a terrible habit of overpromising and underdelivering.
He's on his 11th straight year of promising Level 5 autonomy in "one year," with his company still firmly stuck at Level 2 autonomy. The robotaxi launch was also nothing short of a disappointment, with EVs confined to a geofenced area in Austin, TX. Lastly, there's been no discernable progress with Optimus, the humanoid robots that would handle repetitive tasks.
These promises from Musk have been baked into Tesla's valuation, but they add virtually no value. If these unfulfilled claims were backed out of Tesla's market cap, Johnson's price target would have a chance to become a reality.
