Only three companies currently have a $4 trillion valuation: Nvidia, Apple, and Alphabet. However, I think this club is about to be a bit more crowded by the time 2028 rolls around. There are three stocks within striking distance of achieving the $4 trillion mark, and one could reach the entry point as quickly as the end of 2026.
In my view, the three stocks that appear to be next in line to gain entry to the $4 trillion club are Microsoft (MSFT +0.27%), Amazon (AMZN -0.71%), and Taiwan Semiconductor Manufacturing (TSM -4.08%). These three stocks are valued at $3.6 trillion, $2.8 trillion, and $2.2 trillion, respectively. By 2028, all three should be in the $4 trillion club, and all of them look like strong investments right now.
Image source: Getty Images.
Microsoft is close to regaining entry
Microsoft is only a stone’s throw away from $4 trillion right now, a barrier it has crossed in the recent past. In fact, it could reach that level again by the end of 2026 if one thing happens.
To start the year, investors were uninterested in the stock and heavily sold it off. However, after a strong earnings report, it is back in the game and has recovered from its lows.
Today’s Change
(0.27%) $1.28
Current Price
$481.63
Key Data Points
Market Cap
Day’s Range
$477.15 – $484.27
52wk Range
$349.20 – $553.72
Volume
24.1M
Avg Vol
40.1M
Gross Margin
67.94%
Dividend Yield
0.74%
Still, Microsoft isn’t valued near the level it used to be at, and trades for 24 times forward earnings.
MSFT PE Ratio (Forward) data by YCharts; PE = price to earnings.
While 24 times forward earnings isn’t necessarily cheap, it is a lot lower than the low 30s price-to-forward-earnings level it used to trade at. If Microsoft could reach 30 times forward earnings before 2026 is over, that would indicate a gain of 23%.
If its market cap rose by 23%, that would price the company at $4.38 trillion, easily gaining re-entry into the $4 trillion club. That’s well within reach, and Microsoft could do it by the end of this year.
Amazon is also cheap
Amazon has a catalyst similar to Microsoft’s, as it’s currently trading for 21 times forward earnings, compared to the neighborhood of 30 times forward earnings it normally trades at.
AMZN PE Ratio (Forward) data by YCharts.
Should Amazon’s valuation rise to 30 times forward earnings, that would result in 44% growth. A 44% higher market cap moves Amazon to $4.05 trillion.
As a result, I think there’s a strong chance that Amazon gets into this club before 2026 is over, but for sure by 2027, since its stock rarely stays beaten down for long.
Taiwan Semiconductor has some growing to do
Last is Taiwan Semiconductor (TSMC for short), which doesn’t have the same catalyst that Amazon and Microsoft share — it trades at 25.5 times forward earnings.
TSM PE Ratio (Forward) data by YCharts.
As a result, TSMC must grow its way into a $4 trillion valuation. With the company being valued at $2.2 trillion right now, for it to join the $4 trillion club by the end of 2028, it must grow at a compound annual rate of about 28%. Fortunately for TSMC investors, that’s slightly below where it expects to grow.
Wall Street analysts expect it to grow its revenue by 43% for the remainder of this year and a 34% pace next year. Because TSMC is reasonably valued and isn’t dealing with shifting profit margins, investors can assume the stock’s growth will be closely tied to the revenue growth. That positions TSMC well to grow above the required rate and reach a $4 trillion market before 2028 is over.
Keithen Drury has positions in Alphabet, Amazon, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
