Large, reputable companies offer stability and safety to an investment portfolio.
More so when the business in question also has a stellar track record and a great brand.
Over the years, the US has minted several trillion-dollar companies with steadily-increasing revenue and profits.
While being so large is a boon, there is also a flip side.
Investors may believe that growth will start to slow as these companies’ revenue and profit bases grow ever larger.
However, as long as these companies possess strong, sustainable growth catalysts, they can still eke out a decent growth rate in the future.
Here are four such trillion-dollar companies with good prospects for further growth.
Amazon (NASDAQ: AMZN)
Amazon is the largest e-commerce company in the world with a market capitalisation of US$1.1 trillion.
Shares of the company may be down 36% year to date but the world is still enjoying healthy in demand for its AWS cloud services
Amazon posted net sales of US$469.8 billion for its fiscal 2021 (FY2021), up 21.7% year on year.
FY2021 net profit surged by 56.8% year on year to US$33.4 billion.
For the first quarter of 2022 (1Q2022), the e-commerce behemoth saw revenue rise 7.3% year on year to US$116.4 billion.
However, the pandemic and supply chain issues caused by the Russia-Ukraine war resulted in a fall in operating profit from US$8.9 billion to US$3.7 billion for the quarter.
Despite this, Amazon Web Services (AWS) reported a 37% year on year growth for 1Q2022 and its cloud services to continue to see strong demand.
Back in April, Amazon also announced its “Buy with Prime” initiative, allowing customers to shop at online merchants’ stores using their Prime member benefits.
Alphabet (NASDAQ: GOOGL)
Alphabet is the parent company of the Google search engine, and also offers other services such as a video-sharing website (YouTube) and a cloud service (Google Cloud).
The US$1.48 trillion company has seen its share price fall 23% year to date as the NASDAQ Composite Index enters a bear market.
Revenue for FY2021 surged by 41% year on year to US$257.6 billion while net income soared by 88.8% year on year to US$76 billion.
The company’s top-line momentum has continued into 1Q2022 with revenue climbing 23% year on year to US$68 billion while operating income has risen from US$16.4 billion to US$20.1 billion.
In particular, its Google Cloud revenue surged by 43.8% year on year to US$5.8 billion as more companies migrated to the cloud.
Alphabet should continue to see healthy demand for its search engine and cloud services, enabling it to grow its advertising revenue further.
It also recently acquired Mandiant for US$5.4 billion to boost cybersecurity for its cloud services.
Microsoft (NASDAQ: MSFT)
Microsoft is a close to US$2 trillion technology company that produces hardware, and software and offers cloud services.
Its share price may have declined by 22% year to date, but its financials remain robust.
Microsoft reported a sparkling set of earnings for its FY2021 ended 30 June 2021.
Revenue increased by 17.5% year on year to US$168.1 billion while net profit climbed 38.4% year on year to US$61.3 billion.
The company’s Intelligent Cloud segment did particularly well – revenue rose 24.2% year on year to US$60 billion while operating profit surged 42.6% year on year to US$26.1 billion.
The operating margin improved from 38% in FY2020 to 43.5% in FY2021 for this division.
Microsoft’s momentum has carried over into the first nine months of FY2022, where revenue rose 20.1% year on year and net profit jumped 25% year on year.
The technology giant has also been active in acquisitions to boost its capabilities, with four announced in the calendar year 2022 so far, including gaming company Activision Blizzard (NASDAQ: ATVI) and Miburo, a cyber threat analysis and research company.
Apple (NASDAQ: AAPL)
Apple remains the world’s most valuable company with a market capitalisation of US$2.25 trillion despite its share price declining by 23.5% year to date.
The inventor of the world’s first smartphone has reported strong results despite supply chain hiccups.
For its fiscal 2021 ended 30 September 2021, Apple’s revenue climbed 33.3% year on year to US$365.8 billion while net profit surged by 65% year on year to US$94.7 billion.
For its fiscal 2022 second quarter ended 31 March 2022, revenue inched up 9% year on year to a new quarterly record of US$97.3 billion.
Its services revenue also reached a new all-time high of US$19.8 billion for the quarter.
Apple should continue to see strong demand for its devices and services as the company maintains its cutting-edge innovation.
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Disclaimer: Royston Yang owns shares of Alphabet and Apple.
