Reaching the trillion-dollar market cap is a testament to any company’s international influence, massive customer base and brand power.
Indeed, being considered a peer of global behemoths like Microsoft, Apple, Google, Meta and Nvidia is nothing to scoff at. While this sounds great, the road to joining their ranks is steep. Potential trillion-dollar companies need to have a competitive advantage. They also need to offer superior products and adapt to the fast-changing needs of the market.
As investors, we would love to have these companies in our portfolio to increase our chances of a comfortable retirement. Right now, some companies are exhibiting this strong potential and are near the 1 trillion dollar mark.
Berkshire Hathaway (BRK-A, BRK-B)
Warren Buffet’s Berkshire Hathaway (NYSE:BRK-A,NYSE:BRK-B) is a holdings company that has operations in various segments. Those include insurance, railroads, Berkshire Hathaway Energy, Pilot Travel Centers, manufacturing and McLane Company.
Berkshire Hathaway focuses on buying established yet undervalued businesses. It maintains stakes in leading companies rooted in its value investing philosophy and cementing itself as an iconic American conglomerate. For example, it recently acquired Pilot Corporation’s remaining 20% interest in Pilot Travel Centers LLC for complete ownership.
Further, the company’s 2023 fiscal year numbers had some impressive results. In terms of their scorecard, operating earnings grew 21% year over year (YOY), reaching $37.35 billion. Overall net earnings came in at a strong $96 billion. That represents a turnaround from the previous year’s net loss of $23 billion.
Finally, Berkshire Hathaway’s strong leadership, based on Warren Buffet’s investment philosophy, is undoubtedly working for the company. Currently, the stock has an approximate market cap of $922 billion. This makes it the likeliest of all potential trillion-dollar companies to cross the finish line.
Eli Lilly and Company (LLY)
One of the largest pharmaceutical companies, Eli Lilly and Company (NYSE:LLY), specializes in drug manufacturing for diseases in neuroscience, oncology, diabetes and immunology.
The company has a strong portfolio of products that include Cymbalta, Adcirca, Humulin, Mounjaro and Yentreve. They have all been receiving tremendously positive response from Mounjaro and Zepbound treatments, which have pushed Eli Lilly’s growth to new heights.
LLY stock has a market cap of approximately $720 billion. So, the company is inches toward the trillion dollar mark with its promising pipeline of new and growth products and positive Phase 2 results for tirzepatide in treating NASH.
Eli Lilly’s 2023 financials ended with 20% YOY revenue growth thanks to the solid performance of its new products. Management expects 2024 revenue to end between $40.4 and $41.6 billion and GAAP EPS between $11.80 and $12.30.
Mounjaro and Zepbound may be the company’s top drugs. Still, its promising lineup and pipeline may push LLY stock to join the ranks of trillion-dollar companies.
Broadcom (AVGO)
Tech company Broadcom (NASDAQ:AVGO) offers enterprise customers various semiconductor, security and software solutions. It operates in two main segments.
The first is infrastructure software, including cyber security solutions, mainframe and distributed software. The second is Semiconductor Solutions, covering product lines and intellectual property licensing, which caters to its clients’ data management and networking requirements.
Recently, Broadcom acquired VMWare, the software company that helps customers virtualize desktop operating systems. Broadcom’s acquisition will enable enterprise customers to build and modernize their private and hybrid cloud environments. The company is fast becoming one of the world’s leading infrastructure technology providers.
Also, Broadcom is well positioned to reach significant milestones as a business. It has strong exposure to AI through AI accelerators and networking products for AI data centers. The latest VMWare acquisition is a strong growth driver for Broadcom’s infrastructure software segment.
With a market cap of $619 billion, one could argue that it has a long way to go before reaching the $1 trillion milestone.
Still, with a 34% growth in total revenue in Q1’24 and an adjusted EBITDA growth of 26% from the same period last year, Broadcom might prove us wrong. If Broadcom reports a strong 2024, AVGO stock might be a potential addition to trillion-dollar companies sooner rather than later.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.