“The next new $1trn stock will be…”

There are a very select few stocks that have seen their market cap exceed $1trn. And those that bought shares before that milestone will be very happy.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The flag of the United States of America flying in front of the Capitol building

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Since The Motley Fool’s mission statement is to make the world smarter, happier and richer, we asked some of our freelance writers which US stocks they think might be next to crack the $1trn threshold — potentially making shareholders very happy indeed!

Berkshire Hathaway

What it does: Warren Buffett’s diversified holding company uses an insurance float model to invest in dozens of businesses.

By Charlie CarmanBerkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) has broken the $700bn market capitalisation barrier, but it’s never reached the trillion-dollar threshold. I think that’s only a matter of time. As I write, the company would need to deliver a 36% share price gain to achieve this landmark.

From 1965 to 2022, Berkshire Class A stock achieved a 19.8% compound annual growth rate. Returns have slowed since the turn of the millennium, but the annual average remains firmly in double digits.

Recent results have been encouraging. In the first quarter, Berkshire posted a $35.5bn profit and accelerated its share repurchases, buying back $4.4bn of its own stock.

A major risk facing the company is the potential loss of investor confidence that could result from its CEO’s looming departure. After all, Buffett is 92.

However, his successor Greg Abel has already taken on many responsibilities, suggesting the handover could be less problematic than some fear.

Charlie Carman owns shares in Berkshire Hathaway. 

Berkshire Hathaway

What it does: Berkshire Hathaway is a diversified conglomerate that operates in sectors including insurance and retail and owns a stock portfolio.

By Christopher Ruane. The famed investor Warren Buffett has built Berkshire Hathaway over the course of decades.

Since taking the company over in 1965, Buffett has achieved a compounded annual gain of 19.8% in its per-share market value.

Some years are markedly better than others. In general, I think the defensive nature of many Berkshire businesses means that it can do well when the wider market stumbles. In 2007, for example, its compounded annual gain was 28.7% while the benchmark S&P 500 only achieved 5.5%.

The economy looks weak again to me, but one big difference is Berkshire’s massive position in Apple. If tech stocks including Apple fall, that could hurt Berkshire’s share price.

But I think the company’s broadly defensive asset base and Buffett’s steady hand on the tiller could help Berkshire ride out the next storm well. Its shares have risen 81% in five years and today the market capitalisation is $736bn.  

Christopher Ruane does not own shares in any of the companies mentioned.

Eli Lilly

What it does: Eli Lilly is a global healthcare company with products spanning oncology, immunology, diabetes and neurology.

By Ben McPoland. I think biopharma giant Eli Lilly (NYSE: LLY) could become the newest $1trn stock. Its market cap of $435bn already makes it one of the largest companies in the world.

The firm has a packed late-stage pipeline of potential blockbusters. One is its Alzheimer’s treatment, donanemab,which has successfully slowed memory and thinking decline in a rigorous phase 3 trial.

A second is Mounjaro, which is a medicine already used by people with type 2 diabetes. It is currently being assessed by US regulators and the NHS as a repositioned treatment for weight loss.

Needless to say, a proven and safe treatment for obesity (which is a global health issue) could be a huge deal for the company. Indeed, some analysts think it could become the biggest selling drug ever. And it could be approved by the end of this year. 

One risk is that this huge potential is already priced into the stock, with its trailing P/E of 72. Any disappointing regulatory news could hit the share price hard.  

Ben McPoland does not own shares in Eli Lilly.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Smart young brown businesswoman working from home on a laptop
Investing Articles

Should I be watching the Greatland Gold (LSE: GGP) share price?

Recent rallies in valuable metal prices has boosted the Greatland Gold share price, but is there still an opportunity for…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

The abrdn share price is down 23% in the last year, should I buy?

Asset management firms have had a rough time lately, but with the abrdn share price down heavily, is now the…

Read more »

Hand of a mature man opening a safety deposit box.
Investing Articles

If I’d invested £5k in red hot BAE Systems shares 5 years ago here’s what I’d have today

BAE Systems shares have smashed the FTSE 100 for years and Harvey Jones is keen to buy more as they…

Read more »

Investing Articles

How I’d aim to earn £16,100 in passive income a year by investing £20k in a Stocks and Shares ISA

Harvey Jones is building a portfolio of high-yielding FTSE 100 dividend stocks that should give him a high and rising…

Read more »

Investing Articles

Down 8% in a month! The BP share price is screaming ‘buy, buy, buy’ at me right now 

When crude oil falls, the BP share price invariably follows. Harvey Jones is wondering whether this is the right point…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Could the 9.8% M&G dividend yield get even bigger?

Christopher Ruane reckons that, although the M&G dividend yield is already close to a double-digit percentage, it could get better…

Read more »

Investing Articles

How much passive income could I earn by putting £380 a month into a Stocks and Shares ISA?

Christopher Ruane explains how he'd aim to turn a Stocks and Shares ISA into four-figure passive income streams each year.

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

2 passive income stocks I’m buying before an interest rate cut

With the market expecting interest rates to fall in August, time might be running out for investors looking to buy…

Read more »