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Globe and Mail
03-07-2025
- Business
- Globe and Mail
Prediction: 2 Stocks That'll Be Worth More Than Berkshire Hathaway 10 Years From Now
Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is the largest company in the stock market not in the technology sector. As of this writing, the conglomerate led by Warren Buffett had a market cap of about $1.05 trillion -- a tremendous accomplishment for a business built on value investing principles and long-term compounding. There are nine members of the trillion-dollar club in the U.S. stock market right now (Berkshire is No. 9). But it's safe to say that over the next decade, there will likely be many companies that achieve a 13-figure valuation. For many, doing so wouldn't be too much of a stretch. For example, Walmart and Visa currently have valuations of $776 billion and $675 billion, respectively, so both could get to $1 trillion over the next decade with even modest annualized returns. On the other hand, there are some that I think have an excellent chance of getting there through excellent stock performance. Here are two in particular that would need to deliver multibagger returns to investors in order to join the trillion-dollar club, and that I feel have a strong chance of getting there. A great environment for banking? Bank of America (NYSE: BAC) has a $353 billion market cap today, and is one of the largest banks in the world. To achieve a $1.05 trillion market cap like Berkshire has, it would require the stock to average about an 11% annual gain over the next decade. This is certainly within the realm of possibilities, as I feel the conditions for the banking industry will be generally favorable -- at least for the next few years. Most economists predict that the general direction of interest rates will be lower over the coming years, and this should help boost loan demand and reduce deposit costs. Plus, the Trump administration is not only likely to generally loosen regulations going forward, but also campaigned on a 15% corporate tax rate, which would be a big benefit to Bank of America's bottom line. CEO Brian Moynihan and his team have done an excellent job of embracing modern banking technology and creating a more efficient operation, and the bank's overall efficiency and return on assets (ROA) is likely to trend in the right direction as a result. In short, a combination of excellent leadership and favorable economic and political conditions could certainly lead to a trillion-dollar valuation. One caveat is that Bank of America is one of the larger stock positions in Berkshire's portfolio, so if it performs well, it would also have the effect of raising Berkshire's market value. But even so, if the economic environment cooperates, Bank of America is a well-run institution and could certainly deliver excellent returns over the next decade. An excellent track record of outperformance Advanced Micro Devices (NASDAQ: AMD), better known simply as AMD, has performed quite well over the past few months, rebounding sharply from the April lows. But I think it's just getting started. The chipmaker has a current market cap of $233 billion, so it would need a roughly 16% annual gain over the next decade to reach Berkshire's $1.05 trillion. And I think it has an excellent shot of getting there. AMD often gets ignored by investors because it is a distant second place to Nvidia when it comes to the high-momentum data center GPU market. But there are a few things to keep in mind. For one thing, the data center accelerator market is a massive and fast-growing one, expected to reach $240 billion in global sales volume by 2030. So, even if AMD can boost its market share by just a few percentage points, it would be a big win for the company's top line. It's also important to realize that while data center chips are the fastest-growing part of the business right now, there's a lot more that AMD does. For one thing, it has steadily been taking share from Intel in the PC and laptop processor market. It also makes chips for autonomous vehicles, an area expected to grow rapidly over the next decade or so. Ever since CEO Lisa Su took the reins in late 2014, it has been a mistake to bet against AMD. During her tenure, AMD has delivered a staggering 4,180% gain for investors (about 40% annualized). While I don't exactly think that performance level will repeat itself, it wouldn't need to for AMD to reach a trillion-dollar valuation. Will these two companies join the trillion-dollar club? To be clear, I'm predicting both of these companies will have a higher market cap in 10 years than Berkshire Hathaway does today. Assuming Berkshire delivers 10% annualized returns over the next decade, which would be historically low for the conglomerate, it would have a market cap of about $2.7 trillion a decade from now, which obviously would be less likely for both of these companies to achieve (but it wouldn't be impossible). The key point is that both Bank of America and AMD have fantastic leadership and a high probability of an excellent growth environment over the next decade. Of course, there's a lot that would need to go well for either to achieve a trillion-dollar valuation within the next decade, but the risk-reward dynamics of both stocks look excellent right now. Should you invest $1,000 in Bank of America right now? Before you buy stock in Bank of America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $939,655!* Now, it's worth noting Stock Advisor 's total average return is1,045% — a market-crushing outperformance compared to178%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Bank of America is an advertising partner of Motley Fool Money. Matt Frankel has positions in Advanced Micro Devices, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, Berkshire Hathaway, Intel, Nvidia, Visa, and Walmart. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.
Yahoo
03-07-2025
- Business
- Yahoo
Prediction: 2 Stocks That'll Be Worth More Than Berkshire Hathaway 10 Years From Now
Berkshire Hathaway is the only nontechnology company with a trillion-dollar market cap. Bank of America could benefit from favorable bank industry tailwinds. AMD could have a massive growth opportunity thanks to artificial intelligence (AI) and other major tech trends. 10 stocks we like better than Bank of America › Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is the largest company in the stock market not in the technology sector. As of this writing, the conglomerate led by Warren Buffett had a market cap of about $1.05 trillion -- a tremendous accomplishment for a business built on value investing principles and long-term compounding. There are nine members of the trillion-dollar club in the U.S. stock market right now (Berkshire is No. 9). But it's safe to say that over the next decade, there will likely be many companies that achieve a 13-figure valuation. For many, doing so wouldn't be too much of a stretch. For example, Walmart and Visa currently have valuations of $776 billion and $675 billion, respectively, so both could get to $1 trillion over the next decade with even modest annualized returns. On the other hand, there are some that I think have an excellent chance of getting there through excellent stock performance. Here are two in particular that would need to deliver multibagger returns to investors in order to join the trillion-dollar club, and that I feel have a strong chance of getting there. Bank of America (NYSE: BAC) has a $353 billion market cap today, and is one of the largest banks in the world. To achieve a $1.05 trillion market cap like Berkshire has, it would require the stock to average about an 11% annual gain over the next decade. This is certainly within the realm of possibilities, as I feel the conditions for the banking industry will be generally favorable -- at least for the next few years. Most economists predict that the general direction of interest rates will be lower over the coming years, and this should help boost loan demand and reduce deposit costs. Plus, the Trump administration is not only likely to generally loosen regulations going forward, but also campaigned on a 15% corporate tax rate, which would be a big benefit to Bank of America's bottom line. CEO Brian Moynihan and his team have done an excellent job of embracing modern banking technology and creating a more efficient operation, and the bank's overall efficiency and return on assets (ROA) is likely to trend in the right direction as a result. In short, a combination of excellent leadership and favorable economic and political conditions could certainly lead to a trillion-dollar valuation. One caveat is that Bank of America is one of the larger stock positions in Berkshire's portfolio, so if it performs well, it would also have the effect of raising Berkshire's market value. But even so, if the economic environment cooperates, Bank of America is a well-run institution and could certainly deliver excellent returns over the next decade. Advanced Micro Devices (NASDAQ: AMD), better known simply as AMD, has performed quite well over the past few months, rebounding sharply from the April lows. But I think it's just getting started. The chipmaker has a current market cap of $233 billion, so it would need a roughly 16% annual gain over the next decade to reach Berkshire's $1.05 trillion. And I think it has an excellent shot of getting there. AMD often gets ignored by investors because it is a distant second place to Nvidia when it comes to the high-momentum data center GPU market. But there are a few things to keep in mind. For one thing, the data center accelerator market is a massive and fast-growing one, expected to reach $240 billion in global sales volume by 2030. So, even if AMD can boost its market share by just a few percentage points, it would be a big win for the company's top line. It's also important to realize that while data center chips are the fastest-growing part of the business right now, there's a lot more that AMD does. For one thing, it has steadily been taking share from Intel in the PC and laptop processor market. It also makes chips for autonomous vehicles, an area expected to grow rapidly over the next decade or so. Ever since CEO Lisa Su took the reins in late 2014, it has been a mistake to bet against AMD. During her tenure, AMD has delivered a staggering 4,180% gain for investors (about 40% annualized). While I don't exactly think that performance level will repeat itself, it wouldn't need to for AMD to reach a trillion-dollar valuation. To be clear, I'm predicting both of these companies will have a higher market cap in 10 years than Berkshire Hathaway does today. Assuming Berkshire delivers 10% annualized returns over the next decade, which would be historically low for the conglomerate, it would have a market cap of about $2.7 trillion a decade from now, which obviously would be less likely for both of these companies to achieve (but it wouldn't be impossible). The key point is that both Bank of America and AMD have fantastic leadership and a high probability of an excellent growth environment over the next decade. Of course, there's a lot that would need to go well for either to achieve a trillion-dollar valuation within the next decade, but the risk-reward dynamics of both stocks look excellent right now. Before you buy stock in Bank of America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $939,655!* Now, it's worth noting Stock Advisor's total average return is 1,045% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Bank of America is an advertising partner of Motley Fool Money. Matt Frankel has positions in Advanced Micro Devices, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, Berkshire Hathaway, Intel, Nvidia, Visa, and Walmart. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. Prediction: 2 Stocks That'll Be Worth More Than Berkshire Hathaway 10 Years From Now was originally published by The Motley Fool
Yahoo
26-05-2025
- Business
- Yahoo
Can This Unstoppable Stock Join the $1 Trillion Club by 2035?
Netflix has created an entirely new entertainment category that has propelled monster growth. With its scaled-up internet platform, it now regularly generates sizable earnings and free cash flow. Lofty projections aren't needed to see this company reach the exclusive trillion-dollar club in 10 years. 10 stocks we like better than Netflix › As of this writing, there are 11 companies that carry a market capitalization of at least $1 trillion. Investors who got in on these businesses early on certainly benefited from huge portfolio gains. This might push you to try and identify potential new entrants to the 13-figure club in the future. There's one industry-leading enterprise known for its innovative culture and success at disrupting an entire industry -- and it's currently worth about $500 billion. Its shares have been a monster winner, rising 1,250% just in the past decade. Can this unstoppable stock join the coveted $1 trillion club by 2035? Here's what investors need to know. The dominant company that could be on its way to a trillion-dollar valuation is Netflix (NASDAQ: NFLX). It deserves credit for introducing the world to streaming video entertainment, completely upending the traditional cable TV industry. Becoming a leader in the internet age definitely allows Netflix to be placed in the same category as businesses worth more than $1 trillion. Netflix's growth has been impressive. Between 2014 and 2024, revenue increased at a compound annual rate of 21.6%. That top-line figure was up 12.5% in the first quarter. This was propelled, unsurprisingly, by quickly adding new members across the globe. Previously unthinkable strategic pivots are now normal. Netflix has a presence in video games, and it's getting more involved in showing live events on the platform. What's more, the leadership team has found success by clamping down on password sharing. The cheaper, ad-based tier is also very popular, bringing in price-sensitive viewers. These days, Netflix is a scaled media company that generates huge profits despite plans to spend $18 billion in cash on content just this year. Having a massive revenue and user base supports strong unit economics. The result is significant earnings and free cash flow generation. The growth could continue for the foreseeable future. "We're less than 50% penetrated into connected households," CFO Spencer Neumann said on the Q4 2024 earnings call. As mentioned, Netflix currently carries a market cap of about $500 billion. So, to see this figure reach $1 trillion in a decade, it would need to expand by 100% or roughly 7% per year. In the past 10 years, the market cap has climbed by a whopping 1,250%. Investors would expect a notable slowdown to occur, which I think is a reasonable way to view things. Changes in the valuation can have a profound impact as well. Netflix shares trade at a price-to-earnings (P/E) ratio of 56.5, boosted by their incredible past performance. This is expensive, in my view. However, if we assume that the P/E multiple gets cut in half to 28 in 10 years, earnings per share (EPS) would need to grow at a compound annual rate of 15% between now and 2035 for the company to enter the $1 trillion club. For what it's worth, Netflix's EPS has increased at a much faster clip in the previous decade. Taking all things into account, it's very easy to believe the market cap will get to a 13-figure number in 10 years. It can certainly be exciting to own a stock that becomes a trillion-dollar enterprise. This usually means there are big returns on tap. However, in this case, I believe investors should think twice before adding Netflix to their portfolios. Again, the valuation comes into play. At a P/E ratio that's approaching 60, I think there is zero margin of safety for prospective buyers. In other words, Netflix must execute flawlessly with no hiccups for investors to maybe have the chance to achieve adequate returns. It's best to practice patience for now. Before you buy stock in Netflix, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Netflix wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy. Can This Unstoppable Stock Join the $1 Trillion Club by 2035? was originally published by The Motley Fool
Bloomberg
12-05-2025
- Automotive
- Bloomberg
Tesla's Trillion-Dollar Market Value Is Fueled by Amnesia
Tesla Inc. is back in the trillion-dollar club for the first time since February. Elon Musk's electric vehicle maker added about $65 billion of market value on Monday morning, as of writing this, taking it into thirteen figures again. The obvious catalyst is the partial truce in the US-China trade war, fueling a 2.5% rally in the S&P 500 Index. Tesla's gain is more than double that, presumably reflecting the specific benefits it stands to reap from all this. These include… vibes?
