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This Could Be the World's Most Valuable Company in a Decade

While the current list of the world's most valuable companies is a short one, this roster could easily expand in the coming years.

In this segment of Backstage Pass, recorded on Nov. 3, Fool contributors Trevor Jennewine, Brian Withers, and Rachel Warren weigh in on what this list could look like in just 10 years.

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Trevor Jennewine: We're in the middle of earnings season and last week, we had some tech giants announce earnings. Apple was one of those companies, and I thought they posted relatively strong results for the fourth quarter. Revenue was up 29% to 83.4 billion. Then of particular note, iPhone sales surged 27% to almost $39 billion. But both of those numbers actually fell short of Wall Street's expectations and on the call, CEO Tim Cook mentioned supply chain disruptions as the cause there. He actually noted that headwinds related to supply chain bottlenecks cost the company about $6 billion dollars. Those revenue numbers could have been significantly higher.

As a result, shares of Apple fell a few percentage points, they've actually recovered most of that ground since then, but not enough to stop Microsoft (NASDAQ: MSFT) from at least temporarily claiming the crown as the world's most valuable company in terms of market cap. Prior to the markets open today, Microsoft's market cap was $2.5 trillion, and Apple's was $2.46 trillion. That could have flip-flopped by now. But if you go back 15 years, the top two companies look completely different.

We've got two tech companies battling for the top right now. If you go back to 2006 the two most valuable companies in the world, were ExxonMobil and General Electric. Very different set of businesses there. Here's my question, and I would love if there's any viewers who have their input that I'd love to hear your recommendations too. No one knows the future, but let's make some wild predictions. We've got a lot of driving forces right now like digital transformation that are causing changes across almost every industry.

Then a lot of these different technologies are also reshaping the world like renewable energy, artificial intelligence, gene sequencing and editing, robotics, blockchain, augmented, and virtual reality. Keeping all of those forces in mind, try and look 10-15 years down the road and then name a company that you think will rank in the top three in terms of market cap. It can be Apple and Microsoft, or it can be a different company. Brian, let's start with you.

Brian Withers: Yeah. This one was a tough one and I appreciate you bringing up the thought exercise because it's great to think about over decades of periods of time and what can happen. Certainly Microsoft being in the lead today puts it with a likelihood that it could be still in the top 10, 15 years from now. But I'm going to take that and not just assume that they'll get there from here. If you look at Microsoft over the last 10 years, I thought they were big 10 years ago. But they've more than 10X'd their market cap over the last decade.

We did a deep dive, Toby and I did a deep dive on Microsoft. He's a big Microsoft shareholder, and we looked at the market cap or the addressable market and it's been a while since Microsoft did this exercise. But I think it was like about five years ago and it was in the trillions, the trillions of dollars that Microsoft could have on an annual basis. The market cap is certainly even just a multiple of their addressable market. I'm going with Microsoft.

Certainly I will say it's absolutely going to be a software company. I love there's a recent tweet from Bill Mann and the folks of The Morning Show have probably seen this. He tweeted the new acronyms. They go around the FAANG stocks and whatever. Well, Bill came up with MANAMANA. Which is Meta, Apple, Netflix, Amazon, Microsoft, Alphabet, Nvidia, and Adobe. [laughs] He had a little clip of the MANAMANA that the Muppets did, which was absolutely hilarious. I wouldn't be surprised if it's one of the MANAMANA companies.

Rachel Warren: [laughs] Yeah.

Brian Withers: I didn't leave any room for you Rachel, I picked them all. [laughs]

Rachel Warren: I know. I'm like, well, there's not a whole lot of options now, is there? [laughs] It's a side note. I don't know it's going to take me a really long time to get used to these new acronyms. I was like all-in-all the FAANG craze, this works, I can wrap my head around this and now it's just confusing. But I will say I do definitely agree that it is likely to be one of these companies.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. 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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Brian Withers has no position in any of the stocks mentioned. Rachel Warren owns shares of Alphabet (A shares), Amazon, and Apple. Trevor Jennewine owns shares of Adobe Inc., Amazon, and Nvidia. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Netflix, and Nvidia. The Motley Fool recommends Adobe Inc. and recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.


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