“The next new $1trn stock will be…”

“The next new $1 trillion stock will be…”

Since The Motley Fool's mission is to make the world smarter, happier, and richer, we asked some of our freelance writers which U.S. stocks they think could break the $1 trillion mark — something that could make shareholders very happy indeed!

What it does: Warren Buffett's diversified holding company uses an insurance float model to invest in dozens of businesses.capitalization barrier, but never reached the trillion dollar mark. I think it's only a matter of time. As I write, the company would need to deliver a 36% gain on its share price to reach that milestone.

From 1965 to 2022, Berkshire's Class A shares achieved 19.8% compound annual growth. Returns have slowed since the turn of the millennium, but the annual average remains firmly in double digits.Recent results are encouraging. In the first quarter, Berkshire reported a profit of $35.5 billion and accelerated its share buybacks, buying back $4.4 billion of its own stock.

The main risk facing the company is the potential loss of investor confidence that could result from the imminent departure of its CEO. After all, Buffett is 92.However, his successor, Greg Abel, has already taken over many duties, suggesting that the handover could be less problematic than feared.

Berkshire Hathaway

What it does: Berkshire Hathaway is a diversified conglomerate that operates in industries including insurance and retail and owns a stock portfolio.Since taking over the company in 1965, Buffett has achieved a compounded annual return of 19.8% in market value per share.

Some years are significantly better than others. In general, I think the defensive nature of many of Berkshire's businesses means they can thrive when the broader market stumbles. For example, in 2007 its compounded annual return was 28.7%, while the benchmark S&P 500 achieved only 5.5%.Again, the economy looks weak to me, but one big difference is Berkshire's massive position in Apple. If tech stocks, including Apple, fall, it could hurt Berkshire's stock price.

But I think the company's broadly defensive asset base and Buffett's firm hand at the helm could help Berkshire weather the next storm well. Its shares have risen 81% in five years, and today the market capitalization is $736 billion.Christopher Ruane does not own shares in any of the companies mentioned.

Eli Lilly

What it does: Eli Lilly is a global healthcare company with products spanning oncology, immunology, diabetes and neurology.The company has a stock of potential blockbusters in the last phase. One is the Alzheimer's disease treatment, donanemab, which successfully slowed the decline of memory and thinking in a rigorous phase 3 study.The other is Mounjaro, which is a drug already used by people with type 2 diabetes. It is currently being assessed by US regulators and the NHS as a repositioned weight loss treatment.

Needless to say, a proven and safe treatment for obesity (which is a global health problem) could be a huge problem for society. Indeed, some analysts think it could become the best-selling drug ever. And it could be approved by the end of this year.One risk is that this huge potential is already in the stock price, with a trailing P/E of 72. Any disappointing regulatory news could hit the stock price hard.

It seems ridiculous, but we almost never see stocks that look this cheap. Still, this recent "Best Buy Now" has a price-to-book ratio of 0.51. In plain English, this means that investors are effectively entering a business that holds £1 in assets for every 51p they invest!

Of course, this is the stock market, where money is always at risk — these valuations can change and there are no guarantees. However, some risks are much more interesting than others, and at The Motley Fool, we believe this company is one of them.What's more, it currently boasts a stellar dividend yield of around 8.5%, and it's possible for investors to jump in at near-historic lows right now. Want to make a name for yourself?

In the ever-evolving stock market environment, there is one question on every investor's mind: "What's the next big thing?" As the market continues to grow, it is critical to identify emerging companies with the potential to become the next $1 trillion stocks. In this article, we'll explore the key factors to look for in such companies and uncover the most promising trends that could lead us to the next game-changing investment opportunity.

Disruptive technology and innovation

One of the most important success factors in the stock market is innovation. Companies that bring truly disruptive technology to market often experience exponential growth and rapidly increase their market capitalization. The next $1 trillion stock is likely to be the company that revolutionizes the industry and introduces cutting-edge solutions that will change the way we live, work and do business. Keep an eye out for companies at the forefront of areas such as artificial intelligence, renewable energy, biotechnology and blockchain, as these sectors have huge potential for growth.

Market trends and demographics

Understanding market trends and demographic shifts is critical to predicting the next big stocks. As the world's population grows and consumer preferences evolve, companies that adapt to these changes tend to thrive. Consider the impact of an aging population, urbanization, and the rise of e-commerce on various industries. The companies that stand to gain the most from these moves could be those that reach the coveted $1 trillion valuation.

Financial performance and sustainable growth

Financial stability is a fundamental factor in evaluating potential investments. Companies with a track record of consistent revenue growth, strong profit margins and effective cost management are more likely to reach the $1 trillion mark. Look for businesses that can sustain growth over the long term, even during an economic downturn. A solid balance sheet and a clear path to profitability are indicators of the company's potential to become a future stock market giant.

ESG (Environmental, Social and Governance) criteria

Investors are increasingly considering ESG factors when making investment decisions. Companies that  sustainability, social responsibility and good governance often attract a loyal customer base and garner favorable attention from investors. Another $1 trillion stock could be a company that excels in ESG performance, reflecting a commitment to making a positive impact on the world while delivering financial success.

As we look for the next $1 trillion stock, it's critical to focus on companies that embody disruptive innovation, adapt to market trends, demonstrate strong financial performance and prioritize ESG criteria. The stock market is full of opportunities, but the key is to identify companies that have the potential to redefine the industry and create lasting value. By staying informed and keeping these basic factors in mind, you'll be in a better position to spot future giants of the stock market and make smart investment decisions.