It was not that long ago that there were no companies with a value of $1 trillion. Thanks to a booming market over the past couple of years, though, we now have five companies with market caps over $1 trillion.
That number is likely to go even higher over the next few years. And some of these stocks reaching this threshold seem like very smart investments right now. Here are two of them to invest in that might join the $1 trillion club.
Johnson & Johnson
Johnson & Johnson might reach the $1 trillion value in the not-too-distant future. J&J’s total market cap currently is at $470 billion.
To be sure, Johnson & Johnson is not likely to give jaw-dropping growth. However, the firm has several solid growth paths, notably their autoimmune drugs Tremfya and Stelara and their blood cancer drug Darzalex.
J&J also continues to put money into strategic acquisitions and research that could position it for better growth in the future. One-fourth of the firm’s total revenue is from products that were launched within the past five years.
Do not overlook the vital importance of the company’s dividend in its total return. The company is a Dividend Titan with 59 consecutive years of increasing their dividend. Its dividend yield is currently almost 2.4%. Over the past five years, J&J’s reinvested dividends were roughly 30% of its overall return.
Nvidia
Nvidia could be the first of these two stocks to join the $1 trillion marker. It is growing at a much faster pace than most other companies in this league.
I think Nvidia’s great momentum will keep going. The company’s GPUs should enjoy better demand as gaming applications need more power.
Artificial intelligence might become a much bigger market for Nvidia too. The company already produces significant revenue with data centers by selling its GPUs. Its AI-powered driving platform is also being used inside new self-driving trucks.
Perhaps the largest long-term money maker for Nvidia, though, is what is known as the metaverse. The company’s section of the metaverse — Omniverse. CEO Jensen Huang stated during Nvidia’s second-quarter conference call that he believes the metaverse will “be a new economy that is bigger than our current economy.” If he is right, Nvidia’s market cap might eventually become a lot higher than $1 trillion.
Author: Steven Sinclaire
Comments are closed.