3 Potential Trillion-Dollar Stocks to Watch by 2030

U.S. companies have a rich history of creating substantial value, and the stock market has witnessed the ascent of five American technology giants with valuations exceeding $1 trillion. Now, three more companies seem poised to join this elite club before the end of the decade. Let’s delve into the potential contenders: Meta Platforms, Oracle, and Tesla.

1. Meta Platforms (META)

Key Data Points:

• Market Cap: $1,193 billion
• Current Price: $468.11

Meta Platforms, the owner of social media giants Facebook, Instagram, WhatsApp, and Threads, is staging a remarkable comeback. After a 76% valuation dip in 2022 due to metaverse-related challenges, Meta has rebounded, with its stock soaring 127% in 2023.

AI-Driven Revival:

• Reels Feature: Meta’s short-form video feature, Reels, fueled its resurgence, competing with TikTok.
• AI Discovery Engine: A 7% increase in user engagement on Facebook and a 24% surge on Instagram were attributed to Meta’s AI discovery engine.
• AI in Advertising: Meta leverages AI to enhance advertising effectiveness, offering generative AI tools for content creation and predictive analytics.

Financial Outlook:

• Valuation: Currently valued at $728 billion.
• Earnings Projection: Expected to deliver $12.32 in full-year earnings per share in 2023.
• Forward P/E Ratio: Trades at a forward P/E ratio of 23.

Potential Path to $1 Trillion:

• Moderate Growth: With a constant P/E ratio, Meta needs only a modest 4.6% annual earnings growth to reach $1 trillion by 2030.
• Positive Trajectory: 2023’s performance suggests sustainable growth.

2. Oracle (ORCL)

Key Data Points:

• Market Cap: $321 billion
• Current Price: $116.64

Oracle, a stalwart of the technology sector, has shifted focus to cloud computing, particularly with Oracle Cloud Infrastructure.

Dominance in Cloud Computing:

• AI Collaboration: Partnerships with AI chipmaker Nvidia, boasting the highest-performance, lowest-cost GPU clusters.
• Customer Commitment: In fiscal Q4 2023, acquired over 30 AI development customers committing to $2 billion in cloud computing capacity.

Financial Landscape:

• Revenue Generation: Generated $49.9 billion in fiscal 2023.
• Valuation: Currently valued at $316 billion.
• P/S Ratio: Trades at a P/S ratio of 6.3.

Path to $1 Trillion:

• Revenue Growth: Constant P/S ratio requires a 17.9% annual revenue growth for Oracle to justify a $1 trillion valuation.
• Historical Performance: With a compound annual revenue growth rate of 20.2% since 1986, Oracle remains a strong contender.

3. Tesla (TSLA)

Key Data Points:

• Market Cap: $616 billion
• Current Price: $193.57

Tesla, a global leader in the electric vehicle industry, stands out with its advanced fully autonomous self-driving software.

Autonomous Driving Opportunity:

• Revenue Streams: Anticipates recurring revenue from each car with autonomous technology.
• Ride-Hailing Network: Plans to build a ride-hailing network for autonomous vehicles, potentially boosting gross margin from 25% to 70%.

Financial Outlook:

• Valuation: Currently valued at $675 billion.
• Production Plans: Aims to increase EV production by 50% annually.

Potential Growth Catalysts:

• Autonomous Software: Predicted to become Tesla’s most valuable asset, driving a potential 925% stock increase by 2027.

Path to $1 Trillion:

• Production Expansion: Even without autonomous software, Tesla’s ambitious EV production plans could propel it to a $1 trillion valuation by 2030.
• Ark Investment Prediction: Autonomous technology could be a key driver, according to Ark Investment Management.

Conclusion

As we navigate the dynamic landscape of the stock market, Meta Platforms, Oracle, and Tesla emerge as compelling contenders for the coveted $1 trillion club. Their strategic initiatives, financial resilience, and innovative use of AI position them favorably for sustained growth. Investors keen on future trillion-dollar opportunities may find these stocks worth watching as they navigate the evolving economic landscape.