1 Stock-Split Stock Set to Join Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta In the $1 Trillion Club
2024-09-19 11:47:00
The U.S. economy has a stellar track record of producing the world’s most valuable companies. United States Steel became the first $1 billion company in 1901. General Motors then rode the automotive revolution to become the first $10 billion company in 1955. In 2018, Apple became the first to cross the $1 trillion milestone thanks to the success of its iPhone.
Apple remains the world’s largest company with a $3.3 trillion market capitalization, but it has since been joined in the trillion-dollar club by tech giants Nvidia, Microsoft, Amazon, Meta Platforms, and Alphabet.
Broadcom (NASDAQ: AVGO) might be set to join them. It’s currently valued at $761 billion, so its stock only needs to gain 31.4% from here to earn its membership. Here’s why I think it will happen.
It’s clear why investors are willing to pay a premium for the stock right now — Broadcom’s AI semiconductor products are delivering explosive growth, and its acquisitions are adding a tremendous amount of value. However, there is no guarantee investors will be receptive to such a high P/S ratio over the long term, and a reduction back to its five-year average could add years to Broadcom’s quest to join the $1 trillion club.
Therefore, while Broadcom will be a spectacular stock to own during the AI revolution, investors should maintain a very long-term outlook (perhaps of a decade or more) if they buy it today. That will give the company plenty of time to grow into its current valuation.
Should you invest $1,000 in Broadcom right now?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
1 Stock-Split Stock Set to Join Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta In the $1 Trillion Club was originally published by The Motley Fool
