$2 trillion in stocks that actually look cheap

To paraphrase the late Senator Everett Dirksen, a trillion here, a trillion there, and pretty soon you’re talking real money.

Trillion dollar stocks were once unheard of. Then it became a rarity. Now it is almost commonplace. Six stocks currently have a market cap of at least $1 trillion, and several more are knocking on the door to join the elite club.

While all companies are obviously successful and profitable, their trillion dollar status does not automatically confer a buy recommendation. In fact, it may suggest just the opposite. Having come so far so quickly, they may have peaked, at least for now.

Among the half-dozen trillion-dollar market caps, the following two companies are still a buy, despite their soaring valuations.

Key points about this article:

• While not exactly a dime a dozen, trillion dollar stocks are much more common today.
• $1 trillion valuation doesn’t automatically make the stock a buy. However, these two stocks are worth every penny.
• If you want to buy some of the stocks with the most potential, regardless of their market valuation, check it out brand new “Next NVIDIA” report. which features the next AI megatrends and the companies we’re sure can dominate them.

Apple (AAPL)

Apple building entrance with large Apple logo

Apple (NASDAQ:APPL) was the first stock ever to break the $1 trillion valuation mark in 2018. It currently remains the most valuable company on the market, worth more than $3.4 trillion. There’s good reason to believe it will be worth much more soon.

Despite Warren Buffett halving his stake in Apple in the second quarter, the tech star is poised for future growth. The upcoming release of the newest iPhone will prompt a new upgrade cycle as users look to take advantage of Apple’s latest generative AI features. There will undoubtedly be more features released, but the AI ​​capabilities are what most people are interested in.

The iPhone became the best-selling smartphone globally last year, resuming leadership from Samsung. It was the first time since 2010 that Samsung was not the leader, according to market researchers IDC. In the US, it’s not even close. Apple has a 55% share. of the market compared to second place Samsung with 24%.

And what about Buffett’s stockpile? It suggests one of two things: either he’s expecting a big market crash and is moving to cash, or he’s looking to make a big purchase. Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) now has a cash war chest of $277 billion.

Apple wasn’t the only stock it sold, as it also reduced its stock Bank of America (NYSE:BAC), its second-largest holding. Whatever his reasoning, it’s unlikely that the Oracle of Omaha thinks Apple stock isn’t a good company because it still owns $84 billion worth of stock.

Although AAPL’s stock is trading at a high price, the loyalty of its customers to stay in the company’s ecosystem will drive new sales. With new processors and capabilities spread across the entire product line, look for a rising wave of sales to increase inventory.

Meta Platforms (META)

Meta logo with the Facebook logo on the smartphone

Social media leader Meta platforms (NASDAQ:META) is the cheapest of the $1 trillion stocks on the index, with a market valuation of $1.3 trillion. He crossed the threshold in January this year, although this is his second time as a member of the club.

In 2019, when it was still known as Facebook, Meta became a trillion dollar stock. Shares are up 51% in 2024 and 82% higher in the past year. It could continue to grow further.

One of the main arguments in favor of buying Meta platforms is its massive user base. At the end of June, Meta had 3.27 billion users across its family of apps, including Facebook, Instagram, Messenger and WhatsApp.

Having created this critical mass, platforms are now the go-to place for advertisers. The resurgence of digital advertising is a boon for Meta, which posted a 22% increase in revenue to $38.3 billion. Year to date, advertising revenues are 24% higher. As the leading social media site, Meta Platforms will continue to attract a large share of advertising dollars.

It also led to an increase in average revenue per person, which stood at $11.89 at the end of the second quarter, up 14% year-over-year and up 6% sequentially.

As its spending on the metaverse remains a money pit, Meta’s financial performance could be much better. Investors were worried earlier this year when CEO Mark Zuckerberg said he would spend billions on AI. Too many remembered the big results from the billions spent on the virtual world and only had billions in losses to show for it.

Since then, they have embraced Zuckerberg’s plans. Because Meta’s AI ambitions are more consumer-oriented than commercial, it essentially evolves into a super app with some of the most powerful large language models available. Meta calls it Blade based AI agent “the most useful assistant in the world.”

This makes META stock a buy for the long-term growth potential that is built into the company.

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