The $3 trillion club is set to expand significantly in the coming years.
So far, only four companies have surpassed a $3 trillion market capitalization. However, as the stock market continues to rise, many more companies are expected to reach this milestone. In fact, I predict that three specific companies will achieve this feat within the next three years.
The three companies I’m focusing on are Amazon (AMZN 0.39%), Taiwan Semiconductor (TSM 0.47%), and Broadcom (AVGO 1.87%). All are close to achieving this status and seem like solid investment opportunities at the moment.
What’s Needed for Growth?
Some of these businesses have more distance to cover than others. Amazon, currently valued at $2.4 trillion, requires only a modest growth rate of 8% over the next three years to reach $3 trillion. Achieving this level may not excite most investors if growth is minimal, but I believe Amazon has a promising trajectory ahead.
On the other hand, Taiwan Semiconductor is worth $1.72 trillion and Broadcom is at $1.47 trillion. To achieve a $3 trillion valuation in three years, Taiwan Semiconductor would need to achieve a compounded annual growth rate (CAGR) of 20%, while Broadcom would require an even steeper 27% CAGR.
Paths to $3 Trillion
Making a case for Amazon is relatively straightforward. Despite only needing 8% growth, it has consistently increased revenue at over double digits for four consecutive years. Recent trends, especially in artificial intelligence (AI), could accelerate this growth further. Amazon Web Services (AWS), which powers both traditional and AI workloads, reported an impressive 24% revenue growth in the last quarter—a sign that Amazon’s business remains robust.
Taiwan Semiconductor plays a critical role in the AI landscape, producing a significant number of chips used in AI devices. The management anticipates a dramatic rise in AI revenue at nearly 60% CAGR in the upcoming years. Although this is not reflective of overall company growth, they expect a companywide CAGR of 25% from 2024 to 2029, comfortably exceeding the 20% growth needed to reach a $3 trillion valuation.
Lastly, Broadcom has the furthest to go but foresees the fastest growth. Its primary growth engine is its custom AI chips, created in collaboration with major AI players. By customizing chips for specific functions, Broadcom aims to optimize performance at a lower cost. The demand for these chips is soaring, and Broadcom expects to double its AI revenue year over year by Q1 2026, positioning itself to reach a $3 trillion market cap quickly.
