Few groups are as exclusive as the $1 trillion club. This club has only six members, all of them American companies with market capitalizations of at least $1 trillion.
microsoft, apple, Nvidia, alphabet, Amazonand meta platform I'm at the club now. They are all leaders in artificial intelligence (AI). Here are the AI stocks I think will be next to join the $1 trillion club.
next?
It doesn't try to build up suspense. broadcom (NASDAQ:AVGO) I predict that AI stocks will be second only to Meta, Amazon, and other stocks with market caps of $1 trillion or more. However, I'm not arguing that Broadcom will be the next to reach that milestone. It could very well be the next AI stock.
berkshire hathaway It will probably surpass $1 trillion before Broadcom. Warren Buffett's conglomerate already has a market capitalization of more than $900 million.I'm not surprised Eli Lilly The company also reached the threshold ahead of Broadcom, thanks to rapid sales of its weight loss drug Zepbound and type 2 diabetes drug Mounjaro.
But $1 trillion is not out of reach for Broadcom. The semiconductor and infrastructure software maker's market capitalization now exceeds $610 billion. Indeed, the stock price has to rise another 64% or so. But given that Broadcom's stock price has more than doubled in the past 12 months, achieving the gains needed to join the $1 trillion club doesn't seem that difficult.
Why can Broadcom beat Tesla and Taiwan Semi?
Two other AI stocks are also candidates. tesla (NASDAQ:TSLA) and taiwan semiconductor manufacturing (NYSE:TSM). I think Broadcom will outperform both and reach a $1 trillion market cap.
Tesla has a longer road ahead than Broadcom. The electric vehicle (EV) maker's market capitalization currently hovers around $520 million. Tesla also faces some major challenges.
As competition intensifies in China, Tesla has lowered its prices to avoid being left behind. Major US automakers are increasing production of EVs. Perhaps most concerning is that consumer interest in purchasing EVs appears to be stalling.
I think Taiwan Semi poses a bigger threat than Broadcom at $1 trillion. The semiconductor maker has a market capitalization of nearly $620 billion, a close second behind Broadcom. Both companies should benefit from continued strong demand for chips that power AI applications.
However, several rival companies are trying to reduce Taiwanese Cicada's market power. Mainland China's ambitions to take back Taiwan could not only have a negative impact on Taiwan Semi's stock price, but also drive customers in the United States and Europe to competitors.
Broadcom's risks appear to be relatively minor compared to Taiwan Cicada's risks. The company's acquisition of VMware should help accelerate growth. Broadcom's main problem is that broadband sales are declining and carriers are cutting spending.
Is Broadcom stock a buy?
Since I expect Broadcom to be the next AI stock to join the $1 trillion club, do I see this stock as a buy now? Actually, no.
What concerns me about Broadcom is its valuation. The stock is trading at approximately 29 times the forward P/E ratio. Yes, the company should see strong growth in the coming years. Unfortunately, even considering that growth, Broadcom's price is still not attractive to me. I expect it may take longer for the company to reach a $1 trillion market cap than many investors would like.
Should you invest $1,000 in Broadcom right now?
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. Keith Speights has held positions at Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool endorses his Broadcom and recommends the following options: His long January 2026 $395 call on Microsoft and his short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta are the next artificial intelligence (AI) stocks I think will join the $1 trillion club from The Motley Fool.