The 3 Next Trillion-Dollar Companies to Buy Now and Hold Forever

Stocks to buy

Identifying the next trillion-dollar companies becomes crucial amid a challenging economic landscape. And lately, the U.S. has been a hotbed of spending and debt crises. Urgent bipartisan cooperation is needed to address a $1.7 trillion gap in 2023 and the projection of federal debt surpassing 100% of GDP by 2053. 

Understandably, investors are drawn to companies with trillion-dollar potential in a shifting global economy. Notably, three firms standout as poised for significant growth. The first company’s strategic shift and revenue diversification redefine success in pharmaceuticals. The second is at the forefront of semiconductor technology. The third’s market resilience positions them for substantial growth amid industry changes. 

As investors navigate these challenges, here are three well-positioned stocks representing what could be the next trillion-dollar companies.

Berkshire Hathaway (BRK-A, BRK-B)

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Investing in Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) aligns with the investment strategy and market outlook of the Oracle of Omaha, Warren Buffett. Following Buffett’s bearish stance, the firm has strategically sold off certain holdings to bolster cash reserves. This internal rebalancing shields portfolios from economic downturns while providing an opportunity to ride the wave of Buffett’s future investments. 

Berkshire Hathaway is a multinational conglomerate based in Omaha, Nebraska with a market capitalization of $754.32 billion. Over the past two decades, the stock has exhibited an average compound annual growth rate (CAGR) of approximately 10%, slightly surpassing the S&P 500’s 9.75%. Despite this, Buffett has faced challenges in outperforming the market during this period.

Berkshire Hathaway reported its Q3 2023 financials on Nov. 5, revealing a first operating loss of $12.77 billion. However, operating earnings for the quarter surged 40% to $10.76 billion. With a record $157.2 billion cash reserve, Warren Buffett strategically eyes returns in short-term U.S. treasuries, making Berkshire Hathaway a top pick for recession-resistant portfolios.

Meta Platforms (META)

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After a challenging 2022, Meta Platforms (NASDAQ:META) rebounded in 2023, recovering from a significant stock drop. The oversold valuation led to a low price-to-earnings multiple, triggering a wave of bullishness amid an improving ad market and increased interest in growth stocks, driven by artificial intelligence (AI) and ChatGPT.

Despite significant losses in its Reality Labs segment, META remains driven by its core Facebook and app portfolio. Advertising revenue continues to be the primary driver, with marketing revenues strengthening. Investors may find value in META as the macroeconomic outlook improves, and the Reality Labs division holds potential for future growth revenue despite ongoing losses.

With a 15% increase, Meta Platforms could reach a $1 trillion valuation amid bullish markets and growing investor interest. The company reported a strong quarter, showing 23% revenue growth and sales exceeding $34.1 billion. Despite recent layoffs and cost-cutting measures, increased investment in AI and rising labor costs might pressure Meta’s profits in the coming year.

Visa (V)

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Year-to-date, Visa (NYSE:V) surged 18%, boasting a five-year gain of 75%. The company consistently delivers with profit margins exceeding 50% and both top-line and bottom-line growth in double digits. In the fiscal fourth quarter, Visa reported a 10.6% year-over-year revenue increase and a 18.8% year-over-year rise in GAAP net income to $4.7 billion. 

While Visa’s dividend yield is modest at less than 1%, the company demonstrates strong dividend growth. Recently, the company increased its quarterly dividend by $0.07 to $0.52 per share in 2023, marking a robust 15.6% year-over-year growth.

Visa processes over 200 billion transactions annually, earning a fee on each, ensuring consistent revenue and profit. The stock currently sits at a 52-week high $249 and is poised for further growth. The transition to digital payments, expanding merchant acceptance, and increased card usage position Visa for significant gains in the next five years.

On the date of publication, Chris MacDonald has a LONG position in BRK-B, META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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