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Could 1 of These Be the Next Trillion-Dollar Company?

The number of stocks that have surpassed a trillion-dollar market cap is quite small. In this segment of Backstage Pass recorded on Jan. 7, Fool contributors Toby Bordelon, Rachel Warren, and Will Healy discuss the stocks that they think have a chance of joining this elite club in the coming years.

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Toby Bordelon: We talked about big companies. Trillion-dollar companies are fun to talk about. There's been some speculation that Berkshire Hathaway might be the next one. They've had a really good run recently here. They can become the next trillion-dollar company, which would be really interesting to see Warren Buffett's company joining that elusive club while he still CEO hopefully, that would be fascinating.

But my question to you guys is let's put Berkshire aside because we can't pick that one. What one company do you think has the best chance of hitting the trillion-dollar mark next that's not currently a trillion-dollar company other than Berkshire?

Let's start with you, Rachel. What would you say?

Rachel Warren: This was me guessing and I don't know if this will actually come to fruition, but one company I thought of is Johnson & Johnson (NYSE: JNJ). This is a massive pharmaceutical entity that has been around for over a century.

As I was talking about in the last hour, this is a company that's planning on splitting. Its insanely profitable pharmaceutical business and its a medical device business. Those business segments together were set to bring in about $77 billion in 2021.

It will be separating those from its consumer health business, which was on track to generate about $15 billion last year. We'll get that full-year report out here in a few weeks.

But even as a split company, two separate publicly traded entities, I think both of these companies have a lot of room to grow. In the meantime, that could take up to two years for that split to complete.

Could Johnson & Johnson hit a trillion dollars before then? I don't know. Its current market cap is resting about $458 billion. It would essentially have to double from there, but you never know. I think a company like this is one that more investors are going to be taking a look at right now, particularly as so many of your traditional growth stocks are getting hammered.

I think its stability it lends and the constant demand its products generate are really huge buy points for this company, so I don't know. I personally as an investor would be very excited to see [laughs] the stock become a trillion-dollar company. We will see.

Toby Bordelon: Don't you have a little bit of a problem with that there, Rachel, because they're breaking themselves up next year?

Rachel Warren: I know. Well, I'm thinking the pharmaceutical and medical device business, I would think would be the one that would probably have the most likelihood of hitting that market cap compared to the consumer health one. That could be a thing, who knows?

Toby Bordelon: Fair enough. Will, what do you think? Do you have one that's a favorite of yours?

Will Healy: Well, I just could say Meta Platforms (NASDAQ: FB) because it has crossed a trillion. It's high, it's pulled back. I didn't check it today, but I think it's $9.25 billion or something like that.

But they are still growing. They are advertising revenue while the double-digit rates, so they are going into VR with their Oculus headset. Yeah, that's going to be, I think the next one.

Toby Bordelon: I think that's the one I was looking at too, I think it's a little bit because they were actually were a trillion before from what I recall and then they dived down.

I'm like, expect they're going to get back there pretty soon. Another one I'll throw out there is Nvidia (NASDAQ: NVDA). It's currently got a market cap of around $700 billion in a very similar game.

They are a big player, I think in the metaverse and all the excitement there with their hardware. We've got some new stuff coming out of this, quite interesting, but they are in a bunch of different markets.

It's not just the computers, it's the self-driving cars. They play a lot in their hardware. I think that's one that I think you're going to see them a trillion-dollar company. I don't know when. I guess within the next five years. Take a look at that one.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Rachel Warren owns Johnson & Johnson. Toby Bordelon owns Berkshire Hathaway (B shares). Will Healy owns Berkshire Hathaway (B shares). The Motley Fool owns and recommends Berkshire Hathaway (B shares), Meta Platforms, Inc., and Nvidia. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.


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