Prediction: These Are Wall Street's Next 2 Trillion-Dollar Stocks -- and Neither Is Palantir Technologies

Globe and Mail

18 hours ago

Over the last century, no asset class has come remotely close to matching the annual return of stocks. Spanning multidecade periods, it's commonplace to see the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite pushing to all-time highs.
But something that's been exceptionally rare on Wall Street is seeing a publicly traded company hit a nominal market cap of $1 trillion. Only 11 public companies, 10 of which trade in the U.S., have ever achieved this psychologically important valuation:
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Microsoft
Nvidia
Apple
Amazon
Alphabet
Meta Platforms
Broadcom
Berkshire Hathaway
Taiwan Semiconductor Manufacturing
Tesla
Saudi Aramco (not traded in the U.S.)
The trillion-dollar question is: Which companies are next to join this exclusive and elite club?
While game-changing technology stocks have been the correct answer in recent years, and quite a few investors might side with artificial intelligence (AI) -driven colossus Palantir Technologies (NASDAQ: PLTR) as the logical choice, two non-tech stocks appear ideally positioned to join this group of 11 elite businesses sooner than later.
Sorry, Palantir, it's not you!
Since the end of 2022, shares of Palantir have returned nearly 1,900%, which has lifted the company's market cap to north of $300 billion. In other words, Palantir went from being a tech stock of fringe importance to being one of the foundational companies within the sector.
Palantir's claim to fame is its AI- and machine learning-powered Gotham and Foundry platforms. The former assists federal governments with data collection and analysis, as well as aids with military mission planning and execution. Meanwhile, Foundry is a subscription-based service for businesses that helps them make sense of their data and streamline their operations. Neither of Palantir's operating segments has large-scale direct competitors, which is a fancy way of saying it has a sustainable moat.
It also doesn't hurt having the U.S. government as a top client. The multiyear contracts Gotham has landed with the U.S. government have decisively pushed the company into the recurring profit column and made its cash flow quite predictable.
However, Palantir has a valuation problem it's unable to escape.
For more than 30 years, megacap companies on the leading edge of next-big-thing innovations (e.g., artificial intelligence) have endured an eventual bubble-bursting event early in their expansion phase. If an AI bubble were to form and burst, Palantir's multiyear government contracts and enterprise subscriptions via Foundry would keep its sales from immediately plummeting. But it wouldn't mask the company's nosebleed trailing-12-month (TTM) price-to-sales (P/S) ratio of 102.
Previous bubble-bursting events saw market leaders of highly touted trends peak at TTM P/S ratios of roughly 30 to 40. Even if Palantir's sales grew by 30% annually for four consecutive years and its shares stayed exactly where they closed on June 6, its P/S ratio would be 37! No megacap company has been able to sustain a P/S ratio this high over the long run, let alone a triple-digit P/S ratio.
In short, Palantir isn't Wall Street's next trillion-dollar stock. But the following two brand-name, non-tech stocks are ideally positioned to join the club.
Visa: Current market cap of $709 billion
As of this writing after the closing bell on June 6, there are eight publicly traded U.S. stocks hovering between a market cap of $450 billion and $780 billion. None is more capable of sustaining double-digit earnings and sales growth over the next five to 10 years than payment processor Visa (NYSE: V), which is about $291 billion away from becoming a trillion-dollar company.
To state the obvious, Visa benefits immensely from being cyclical. Even though economic slowdowns and recessions are normal, healthy, and inevitable, the average recession since the end of World War II has resolved in just 10 months. In comparison, the average period of economic growth has lasted about five years over the same eight-decade span. This is plenty of time for consumer and business spending to expand, and for Visa to benefit from it.
Visa's position as the domestic payment facilitator of choice is secure. In 2024, it accounted for almost $6.45 trillion in credit card network purchase volume in the U.S., which was nearly $2.4 trillion more than the second- through fourth-largest payment facilitators, combined.
More importantly, there's a longtail opportunity for Visa to organically or acquisitively push into chronically underbanked international markets. Its quarterly operating results consistently point to double-digit percentage growth in cross-border payment volume.
Furthermore, Visa doesn't have to worry about recessions as much as other financial stocks since it's not a lender. By staying focused on payment facilitation, it's not required to set aside capital to cover potential credit delinquencies and loan losses. The end result is Visa bouncing back from economic slowdowns and recessions considerably faster than most lending institutions.
While Visa stock isn't cheap, its forward price-to-earnings (P/E) ratio of 29 is effectively in-line with its average forward P/E ratio over the trailing-five-year period. A sustained double-digit sales and earnings growth rate can push Visa's valuation to the trillion-dollar mark within the next two years.
Walmart: Current market cap of $780 billion
The other business that's a logical choice to reach a trillion-dollar valuation well before any other tech stocks is retail powerhouse Walmart (NYSE: WMT). A 28% gain from where the company's stock closed on June 6 would put it among elite company.
Similar to Visa, Walmart is a clear beneficiary of the nonlinearity of economic cycles. Lengthy periods of economic growth encourage consumers and businesses to spend.
But there is a notable difference between Visa and Walmart. Whereas Visa is adversely impacted by recessions in the form of lower consumer and business spending, Walmart tends to thrive because it sells basic need goods (food, cleaning products, and toiletries, for example). Walmart is going to bring in foot traffic in any economic climate, and its low-cost focus becomes especially meaningful during trying and/or uncertain times. Though it may not sell as much in the way of high-margin discretionary items during recessions, Walmart doesn't struggle to bring shoppers through its doors.
One of the company-specific reasons for Walmart's sustained success is its size. Though bigger isn't always better in the business world, Walmart's size and deep pockets allow the company to purchase products in bulk. Buying more of a good at one time usually lowers the per-unit cost. Walmart then passes along these savings to its customers and undercuts the local competition on price.
Walmart is also having phenomenal success with its omnichannel sales expansion. Though its brick-and-mortar locations are performing well, the growth story of late has been all about online sales and Walmart+ memberships. During the fiscal first quarter (ended April 30, 2025), Walmart generated a 21% increase in domestic U.S. e-commerce sales, as well as delivered its first profitable quarter from U.S. e-commerce. Further, high-margin global fee income tied to Walmart+ memberships jumped by nearly 15% from the prior-year period.
The one issue for Walmart stock is that it's historically expensive. Its shares are tipping the scales at a forward P/E of 33, which represents a 34% premium to its five-year average. However, persistent uncertainty tied to President Donald Trump's tariff and trade policy might be catalyst that helps Walmart sustain its multiple expansion for the foreseeable future.
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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. Sean Williams has positions in Alphabet, Amazon, Meta Platforms, and Visa. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, Taiwan Semiconductor Manufacturing, Tesla, Visa, and Walmart. 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.