U.S. Companies Continue to Scale New Heights: Nine Now Exceed $1 Trillion Valuation
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The impressive list of companies reaching a valuation of $1 trillion includes Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, Tesla, Broadcom, and Taiwan Semiconductor. Although Berkshire Hathaway slipped below this threshold recently, it is projected to regain its status, making it potentially the tenth company in this exclusive group.
Just a few years back, there were no U.S. companies valued at over $1 trillion. By late 2023, only five companies held that status, consisting of the first five mentioned above. Factors including the surge in artificial intelligence (AI), a strong U.S. economy, and dipping interest rates have widened this once-restricted circle. If the current bull market holds through 2025, several additional firms could join the trillion-dollar club.
1. Walmart – Adapting for Growth
Walmart (NYSE: WMT) has made a remarkable comeback in recent years by transforming its traditional retail business into a forward-thinking omnichannel entity. This includes strong performance in e-commerce, a third-party marketplace, and advertising services. Throughout the inflationary landscape, Walmart proved its worth by leveraging its grocery strength and cost advantages to offer competitive prices.
Over the past three years, Walmart’s market cap has more than doubled, and as of December 18, it was up 81% year to date due to solid financial results. Currently valued at $763.8 billion, Walmart would need a 31% market cap increase to hit the $1 trillion mark by 2025. While achieving this level of growth post-2023 could be challenging, it remains a possibility.
Walmart may not achieve 31% earnings growth, but potential expansion in its price-to-earnings ratio (P/E), which sits at 39.2, could occur, especially compared to Costco‘s P/E of 57.
2. Eli Lilly – Leading in Pharmaceuticals
Eli Lilly (NYSE: LLY) has emerged as America’s top pharmaceutical company, driven by soaring sales of its latest treatments for weight loss and diabetes, Zepbound and Mounjaro. Earlier this year, it nearly reached a $1 trillion market cap but faced setbacks due to broader industry challenges.
Currently, Eli Lilly’s market cap is $689.5 billion, having climbed 32% year to date. To achieve a $1 trillion valuation, it would need to grow by 45%. Recent results have shown a 20% revenue increase in the third quarter to $11.4 billion, thanks to gains from its popular drugs. Adjusted net income skyrocketed over 1,000% year-over-year to $1.06 billion, with considerable potential for further international sales. Analysts project a significant increase in adjusted earnings per share (EPS), highlighting the promise of Eli Lilly’s future growth potential.
3. JPMorgan Chase – On the Cusp of Bank History
JPMorgan Chase (NYSE: JPM) stands as the largest bank in the United States and may become the first bank to break the $1 trillion market cap barrier. Its comprehensive approach to both commercial and investment banking, aided by CEO Jamie Dimon’s management, places it significantly ahead of its peers.
Currently up 35% in 2023 and with a market cap of $648.6 billion, JPMorgan Chase would require a 54% boost to cross the $1 trillion threshold. While this might appear daunting for next year, favorable conditions could present themselves.
Investors are optimistic that potential regulatory changes from the upcoming administration could encourage mergers and acquisitions, further benefitting banks like JPMorgan Chase. A supportive economic environment, along with elevated interest rates, could create the ideal backdrop for increasing profits in loan income, making it a potentially opportune time for stock expansion.
Is Walmart a Smart Investment Right Now?
Before investing in Walmart, it’s essential to evaluate your options:
The Motley Fool Stock Advisor team recently outlined their choices for the 10 best stocks to buy, and Walmart is notably absent from this selection. These chosen stocks are believed to have significant growth potential in the years ahead.
Reflecting on history, consider that if you had invested $1,000 in Nvidia when it made that list on April 15, 2005, your investment would now be worth $825,513.*
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JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, sits on The Motley Fool’s board. Other board members include executives from Alphabet and Meta Platforms. The Motley Fool holds positions in and recommends several companies, including the ones mentioned in this article, with a detailed disclosure policy available.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.