Wall Street tends to offer only one guarantee: change. Over time, today’s largest companies by market cap are liable to be replaced by new and innovative businesses.

For instance, only one of the 10 largest publicly traded companies in 1999 is still among the top 10 by market cap today ( Microsoft ). The other nine stocks, which included the likes of Nokia and AIG , have fallen far down the list. Image source: Getty Images. Apple sits atop Wall Street’s pedestal… for now

For the time being, Apple sits on a pedestal above all other U.S.-listed stocks with a market cap of more than $2.4 trillion — and it’s not hard to understand why . To begin with, Apple has one of the most-recognized brands in the world, as well as a highly loyal customer base. Anytime a new product launches, it’s not uncommon to see lines wrapped around Apple’s retail stores.

To build on this point, the company holds half of the U.S. smartphone market share, according to data from Counterpoint, which demonstrates how innovation has driven consumers to the iPhone brand for well over a decade. Furthermore, Apple CEO Tim Cook is overseeing a steady operating transition that emphasizes subscription services over physical products. While this doesn’t mean Apple is giving up on iPhone and Mac innovation, it simply means the company is focusing on higher-margin, loyalty-building subscriptions that diversify its revenue stream and make product-replacement cycles less turbulent. These could be the world’s largest stocks by 2040

But even Apple isn’t perfect. The company’s sales growth has slowed considerably, and persistent share buybacks are accounting for a significant portion of forecast earnings growth. It’s plausible that Apple’s best days are now in the rearview mirror. What follows are three stocks that could, under the right circumstances, leapfrog Apple in market cap by or before 2040. Image source: Amazon. The no-brainer choice: Amazon

Although Microsoft is a legitimate choice to overtake Apple in market value in the next 18 years, it’s e-commerce behemoth Amazon ( AMZN 3.66%) that looks like the no-brainer selection to potentially become the world’s largest stock by market cap.

As many of you are probably aware, Amazon is the undisputed leader in online retail sales . A March 2022 report from eMarketer estimates that the company will bring in 39.5% of all U.S. online spending this year. That’s more than 8 percentage points higher than No. 2 through No. 15 in market share, combined !

Such online retail domination is what’s helped the company sign up 200 million people worldwide to a Prime membership. The annual fees collected from Prime members plays a key role in helping Amazon undercut traditional retailers on price, as well as supports investments in its vast logistics network.

However, online retail isn’t the catalyst that could allow Amazon to surpass Apple. That distinction goes to its cloud infrastructure service segment, Amazon Web Services (AWS), which accounts for about a third of global cloud infrastructure spending.

More importantly, cloud spending is still in its early innings, with cloud services yielding considerably higher operating margins than online retail. Hypothetically speaking, Amazon’s retail sales could shrink, yet the company’s operating cash flow would continue rising due to steady double-digit growth in AWS.

In addition to AWS, Amazon is benefiting from double-digit sales growth in its other higher-margin operating segments, such as advertising and subscription services. As long as the cash-cow segments continue to outperform, Amazon has a reasonably good chance of overtaking Apple well before 2040. Image source: Getty Images. If everything went just right: Meta Platforms

Another stock with the tools and intangibles necessary to surpass Apple in market value by or before 2040 is Meta Platforms ( FB 1.83%), the company previously known as Facebook. But unlike Amazon, it’ll need a few dominoes to fall its way to overtake Apple.

Even though social media stocks have been exceptionally volatile of late, Meta is the clear leader in the industry. Its social destinations (Facebook, WhatsApp, and Instagram) are consistently among the most downloaded. When the first quarter came to a close, Meta’s family of apps counted 3.64 billion monthly active users .

Put another way, over half the adult population in the world interacts with a Meta-owned asset each month. That’s plenty of incentive for businesses to pay top dollar to get their messages in front of users.

What’s more, Meta CEO Mark Zuckerberg hasn’t meaningfully monetized all of his company’s core assets . The vast majority of Meta’s ad revenue derives from Facebook and Instagram. If and when […]

source 3 Stocks That Could Be Worth More Than Apple by 2040

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