Elon Musk, the CEO of Tesla (NASDAQ: TSLA), is no stranger to controversy.
The billionaire is known for being opinionated and has been criticised on occasion over his remarks on COVID-19.
But no matter what your views are of the man, there’s no doubt that his company, Tesla, is poised to change the world.
From electric cars and clean energy, the company is pushing the boundaries to come up with innovative solutions for the planet.
Tesla shares have been on a tear this year, surging by 66.3% year to date to an all-time high and pushing the market capitalisation of the company past US$1 trillion.
The electric car company is not the first to hit the trillion-dollar mark.
Who’s next in line and should investors start adding these names to their watchlists?
Leaders of the band
First off, let’s look at the companies that have already crossed the trillion-dollar threshold.
Competing neck and neck for the top spot are technology giant Microsoft (NASDAQ: MSFT) and iPhone manufacturer Apple (NASDAQ: AAPL).
Both are vying for pole position with market capitalisations of nearly US$2.5 trillion.
Coming in third is Alphabet (NASDAQ: GOOGL), the parent company of Google, at US$1.9 trillion.
E-commerce giant Amazon (NASDAQ: AMZN) is not far behind, being worth US$1.7 trillion at last count.
A common theme among quartet is a strong internet presence which comes with a large base of users. .
The trillion-dollar contenders
A number of companies are not far behind in reaching the vaunted trillion-dollar level.
Meta Platforms (NASDAQ: FB), previously known as Facebook, has a market capitalisation of US$922 billion, putting it just a whisker away from the league.
Interestingly, its recent name change is an attempt for the company to shift away from its namesake Facebook app as it starts building out its vision of the metaverse, an all-inclusive virtual reality space where people can interact within a computer-generated environment.
Then there’s Nvidia Corporation (NASDAQ: NVDA) which designs graphic processing units for gaming markets and manufactures graphic processing units (GPUs) for the data centres and automobile markets.
Nvidia’s market capitalisation stands at US$663 billion, just slightly ahead of Berkshire Hathaway’s (NYSE: BRK.B) US$654 billion.
Berkshire is best known for being a conglomerate run by Warren Buffett which is filled with an electric collection of businesses.
Other contenders include financial services company Visa (NYSE: V), at US$454 billion, and consumer and pharmaceutical products company Johnson and Johnson (NYSE: JNJ), with a market capitalisation of US$435 billion.
Tailwinds coupled with patience
It’s an interesting lineup of businesses from different industries who are gunning to be the next trillion-dollar company.
Two key factors can get them over the finishing line — catalysts and patience.
Catalysts could include latching on to a sustainable trend or hanging onto industry tailwinds that persist over many years.
Meta Platforms continues to enjoy higher year on year daily and monthly average users and is focused on building out the metaverse.
Nvidia is riding on a boom in cloud computing as the pandemic pushes more people online.
And Visa is riding on the tailwinds of increased financial adoption as technology helps more people to connect on the internet.
However, patience is also a necessary ingredient when investing in these businesses.
Just as a young sapling needs time to grow and mature, these companies also require time to steadily grow their revenue and earnings.
And as these financial metrics improve, their share prices should also rise in tandem.
Get Smart: Growth is here to stay
Investors need not lament missing out on the stellar share price rise of Tesla.
The group of five US-listed trillion-dollar companies has shown us the potential for businesses such as Apple and Amazon to keep growing.
There are still opportunities to grab the shares of one of the contenders as the economic recovery takes hold.
Investors who recognise the tailwinds and have the patience are in a good position to see more such companies become trillion-dollar businesses someday.
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Disclaimer: Royston Yang owns shares of Meta Platforms, Apple, Alphabet and Visa.
