You can count on one hand the number of stocks with market caps of more than $1 trillion that trade on U.S. exchanges. And you'd have a finger or two left over.
Apple, Microsoft, and Alphabet are all clearly above the threshold, and Amazon isn't too far away from the $1 trillion mark. But there are other stocks that could join the exclusive club in the not-too-distant future. I predict the following three stocks will also be worth over $1 trillion by 2030.
1. Berkshire Hathaway
In my view,Berkshire Hathaway (BRK.A 0.47%) (BRK.B 0.80%) is the obvious top choice to be the next stock with a $1 trillion market cap. Berkshire currently ranks behind Amazon as the stock that's closest to the magic number, with its market cap of around $674 billion.
How can Berkshire Hathaway add another 50% to its current valuation over the next seven years? One possibility is to put its enormous cash stockpile to work. The company continues to buy back its shares quite a bit, which boosts the value of the remaining shares. Warren Buffett and his team have also invested in other publicly traded companies, including adding to Berkshire's stake in four companies in the fourth quarter of 2022.
Berkshire also benefits from overall economic growth. Revenue and profits for the company's insurance, railroad, and energy businesses should increase nicely if the economy performs well in the coming years. Berkshire's equity holdings, notably including Apple, could help propel its own stock higher, too.
Perhaps the biggest potential obstacle to Berkshire's market cap reaching $1 trillion is Buffett's health. Many investors are drawn to the stock in large part because of the legendary investor's mystique. Buffett will be 93 in August. Should his health fail, Berkshire stock could fall. For now, though, he appears to be in good health and remains actively involved with the company.
2. Nvidia
Nvidia (NVDA 3.18%) stands out as another stock that could realistically hit the $1 trillion market by 2030. The company admittedly has a long way to go to reach the level, with its market cap currently around $573 billion. However, I think Nvidia has what it takes.
Artificial intelligence (AI) stocks are sizzling-hot right now -- Nvidia is no exception. While the sizzle could fizzle temporarily, the long-term prospects for Nvidia's graphics processing units (GPUs) in powering AI applications look very bright. As a case in point, the company recently announced the launch of an AI-as-a-service product that will be available through all the major cloud-hosting providers. This new offering will enable any enterprise to use AI.
While AI is Nvidia's biggest opportunity, it's not the only one. The company made its name in the gaming market. Although gaming faces headwinds right now, they should only be temporary. Other significant growth drivers for Nvidia include its Omniverse virtual collaboration and simulation platform and its self-driving car technology.
It's possible that Nvidia's valuation could get in the way of its march to $1 trillion. The stock already has a lot of growth baked into the price, with shares trading at more than 48 times expected earnings. Nvidia could also encounter increased competition over the next few years. Still, I'll be more surprised if the stock doesn't have a $1 trillion market cap by 2030 than if it does.
3. Visa
Visa (V 0.38%) might seem like something of a longshot to reach a market cap of $1 trillion. The financial services giant isn't even halfway there right now, with its market cap below $454 billion. But don't dismiss Visa's chances.
Stock prices and market caps tend to follow earnings. All Visa has to do to join the $1 trillion club is what it's been doing. The company's earnings have increased by more than 120% over the past seven years. If Visa keeps up this trend, it should easily attain a market cap of at least $1 trillion by 2030.
I don't think Visa will have major problems with earnings growth. The company operates one of the world's two largest payment rails. The shift away from cash to digital payments appears to be an unstoppable trend. Some have speculated that blockchain could disrupt Visa's business model. But the company has fully embraced blockchain and could actually be helped more than hurt by the technology.
Could anything prevent Visa from getting to the $1 trillion level? One thing that comes to mind is that the company has a new CEO as of Feb. 1, 2023. Successful businesses can sometimes stumble after transitions at the top. However, I expect Visa won't skip a beat with a new person at the helm.
Other potential candidates
There are other potential candidates that could also attain market caps of $1 trillion or more by 2030. Tesla, ExxonMobil, and UnitedHealth Group especially stand out. But I think Berkshire, Nvidia, and Visa appear to be the best bets to reach the mark within the next seven years.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet, Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Berkshire Hathaway, Microsoft, Nvidia, Tesla, and Visa. The Motley Fool recommends UnitedHealth Group and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
