Apple, Microsoft, Alphabet, and Amazon are the only four companies with a market capitalization of $1 trillion or more in the United States. Tesla is also close behind at $907 billion.
These are businesses that have delivered amazing returns to their investors. It goes without saying that these firms had much smaller market capitalizations not long ago. Amazon’s market value was $105 billion exactly 10 years ago.
A good starting point for locating the next home-run stocks is businesses that are growing at a rapid speed and have a market capitalization of $100 billion to $500 billion. However, let’s look at Warren Buffett’s Berkshire Hathaway (BRK.A 1.66%) first, which has a higher market value but might be a good purchase right now.
If you’re looking for a better return, consider Advanced Micro Devices (AMD 2.76%). This one is a strong development story with years of growth ahead.
1. Berkshire Hathaway
Berkshire Hathaway is one of the most secure stocks to invest in for the long run. With a market value of $653 billion, it has appreciated 50% over the previous five years. That puts it within striking distance of the trillion-dollar mark. There are a few reasons for its continued rise in value.
Berkshire Hathaway’s balance sheet boasts $122 billion in cash and fixed securities. At the conclusion of the second quarter, the organization possessed a big stock portfolio worth $327 billion. Warren Buffett has a large investment vehicle that includes Apple, Bank of America, and Coca-Cola. Buffett has recently boosted his stakes in Chevron, Occidental Petroleum, and top PC maker HP (formerly Hewlett-Packard).
Berkshire Hathaway, in particular, has been one of Buffett’s best stock ideas in recent years. Buffett amassed $4 billion worth of the firm’s shares throughout the first half of 2022 – a signal that he thinks the stock is undervalued. The share price has more than tripled over the last decade, suggesting it may repeat that performance and push Berkshire Hathaway’s market capitalization past $1 trillion by 2032.
2. Advanced Micro Devices
In the long run, investing in technology-related companies that specialize in data centers, cloud computing, and other high-tech needs might pay off handsomely. AMD has established itself as a key provider of fast processors in these markets.
AMD’s forward price-to-earnings ratio of 23 is low, based on 2022 earnings expectations, and the firm has a market capitalization of $159 billion. To reach $1 trillion in ten years, the share price must rise at a compound annual rate of 20 percent. This chipmaker may make it happen.
For a long time, AMD was considered the underdog in the semiconductor sector. It’s always had to play the part of a low-cost alternative to Intel and Nvidia, but that isn’t the case anymore.
AMD has won over customers with its renewed emphasis on developing high-performance chips, despite the fact that it is still lagging far behind Intel in central processing units (CPUs) and Nvidia in graphics processing units (GPUs). Data center operators are increasingly considering AMD’s Epyc server chips as an alternative to Intel. In the last quarter, AMD gained market share over its CPU competitor. The firm’s data center chips and consumer chips for notebooks and gaming grew by 70% year over year in the second quarter, driven by strong sales growth.
AMD’s CEO, Lisa Su, is widely regarded as one of the most powerful corporate executives today. This underdog has made a remarkable transformation under Su’s leadership, and its best days are still ahead.
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