A surge in price for shares of Nvidia Corporation NVDA after the company’s quarterly earnings results and guidance has put the semiconductor company in the elusive $1 trillion market capitalization club. Here’s a look at the past and current members of the club and who could be next to join.
Nvidia Joins $1 Trillion Market Cap Club: On Tuesday, shares of Nvidia were trading higher and the company officially joined the $1 trillion market capitalization club.
While the move could end up being short-lived or the start of what’s to come, Nvidia is one of a limited number of companies to hit the milestone.
Nvidia reported first-quarter revenue of $7.19 billion, which beat Street consensus estimates of $6.52 billion. The revenue beat previous guidance from the company in a range of $6.37 billion to $6.63 billion.
The company also beat earnings per share estimates of 92 cents with first-quarter results of $1.09 per share.
Nvidia highlighted the strength of its data center business and the demand for AI chips.
Nvidia guided for second-quarter revenue to be $11 billion, plus or minus 2%. The revenue guidance is significantly higher than Street consensus estimates of $7.15 billion.
The strong results and guidance from Nvidia led to many analysts raising their price targets and calling for the company to quickly hit a $1 trillion market capitalization.
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The $1 Trillion Market Cap Club: Nvidia joins five current members of the $1 trillion market capitalization club that includes some of the most recognizable global names.
Other companies with current market capitalizations of over $1 trillion include:
- Apple Inc AAPL: $2.8 trillion
- Microsoft Corporation MSFT: $2.5 trillion
- Saudi Aramco: $2.1 trillion
- Alphabet Inc GOOGGOOGL: $1.6 trillion
- Amazon.com Inc AMZN: $1.2 trillion
Apple and Saudi Aramco were two of the first companies to hit market capitalizations of $1 trillion and $2 trillion. The companies have battled over the years for the title of the world’s most valuable public company.
In mid-2021, Microsoft became only the second U.S. company to ever hit a market capitalization of $2 trillion.
In early 2022, Apple became the first company to hit a market capitalization of $3 trillion.
The current $1 trillion market capitalization club has six members, with Nvidia the new member. Several companies are previous members of the club but have since fallen out. Here are the former members of the club:
- Meta Platforms META: $679.2 billion market cap
- Tesla In TSLA: $630.4 billion market cap
- PetroChina: $189.5 billion market cap
On the list of companies ranked by market capitalization, Meta and Tesla claim the eighth and ninth positions, respectively. PetroChina, which hit a valuation of $1 trillion in 2007 is now the 55th most valuable public company in the world.
Who’s Next To Join The Club?: Back in 2021, Benzinga took a look at three companies that could hit a market capitalization of $1 trillion. Two of the three names ended up joining the club, with Tesla and Nvidia among the picks.
The miss from the list was Tencent Holdings TCEHY, which is currently ranked as the 19th most valuable public company at $383 billion.
Outside the six members of the $1 trillion market capitalization club, there are only four companies with market caps of $500 billion to $1 trillion.
Here are the next highest-valued public companies:
- Berkshire Hathaway Inc (NYSE: BRK-A)(NYSE: BRK-B): $699.3 billion
- Meta Platforms: $$679.2 billion
- Tesla Inc: $630.4 billion
- Taiwan Semiconductor Manufacturing TSM: $536.8 billion
These four names are the most likely to join or re-join the $1 trillion market capitalization club based on their current valuation. The four companies are also the subject of a Benzinga Twitter poll to ask our readers which company they think could be next.
Outside of the companies valued at $500 billion or more, here are the next most valuable public companies:
11. Visa Inc V: $467.6 billion
12. UnitedHealth Group UNH: $449.9 billion
13. LVMH LVMUYLVMHF: $449.5 billion
14. Exxon Mobil Corp XOM: $420.2 billion
15. JPMorgan Chase JPM: $402.4 billion
16. Eli Lilly and Company LLY: $401.9 billion
17. Johnson and Johnson JNJ: $401.7 billion
18. Walmart Inc WMT: $396.3 billion
19. Tencent: $383.0 billion
20. Broadcom Inc AVGO: $364.6 billion
One of the factors that could have a big impact on the next $1 trillion company is M&A (mergers and acquisitions) activity, with any two companies among the top 50 public companies combining to get a huge leg up on joining the club.
Popular picks for the next $1 trillion company are likely Tesla and Meta Platforms due to their past inclusion in the club.
The highly anticipated Cybertruck pickup truck from Tesla could be a needle mover for the share price and valuation later in 2023 and into 2024.
Ark Funds CEO Cathie Wood has also called Tesla the best AI stock to own, even ahead of Nvidia.
“We think Tesla is the biggest AI play out there, the biggest beneficiary,” Wood said.
A rebound in the valuation of video game companies and Chinese companies could improve the market capitalization of Tencent Holdings, the largest gaming company in the world and the owner of stakes in several top Chinese companies.
Investments into clean energy and diversification away from oil could improve the market capitalization of ExxonMobil or Chevron Inc CVX, which is ranked 28th.
The pharmaceutical industry could also produce a member of the club in the future thanks to promising pipelines of potential billion-dollar blockbuster drugs from companies like Eli Lilly, Johnson and Johnson, Merck & Co MRK and AstraZeneca AZN.
The incorporation of another $1 trillion company into the mix could take months or even years, and there's a possibility that this milestone could be achieved by a company that is neither publicly traded at the moment nor listed among the top 20 companies by market capitalization.
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