The idea of an S&P 500 company hitting $1 trillion in market value used to seem impossible. But Tesla (TSLA) just did it — and analysts insist another is on the way.
XAnalysts think Facebook (FB) should be the sixth S&P 500 company valued at $1 trillion or more in 12 months or less, returning it to the trillion-dollar club. It would put the social networking giant in the same trillion-dollar league as Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN) and now Tesla.
Shares of Facebook closed Monday at 328.69, down more than 14% from the 52-week high. That parked the company's valuation at $927 billion. But that was prior to the company late Monday topping third-quarter profit forecasts by 1.3% and jumping in after-hours trading to north of 337 a share. At this price, Facebook is worth $950 billion.
It's only a matter of time until Facebook returns to the rarefied trillion-dollar air, though, say S&P 500 analysts.
Trillion Dollar Redux For Facebook
Predicting Facebook will be a $1 trillion company is somewhat of an anticlimactic call.
The company first closed above a trillion-dollar valuation back in July of this year. But since then, it's been on a rough run. Allegations of putting profit ahead of users' mental health, a high-profile outage and exposure to data limits at Apple knocked Facebook from its trillion-dollar perch. Snap's (SNAP) recent disappointing third quarter and warning of problems tailoring social media ads on iPhones only fanned the worries.
But analysts remain resolute on Facebook's future. They're calling for the stock to rally another 27% from Monday's close to 416.43 in 12 months, says data from S&P Global Market Intelligence and MarketSmith. And if they're right, that would make Facebook a company valued at $1.17 billion. Should you buy Facebook stock now?
Interestingly, if analysts are right, Facebook would supplant Tesla as the fifth most-valuable company in the S&P 500. Analysts actually think Tesla's stock will drop 23% to 787.15. And if that's correct, it means Tesla would be worth just $779.3 billion, or a third less than what they think Facebook will be worth in 12 months. Should you buy Tesla stock now?
Who's Up In S&P 500 After Facebook?
Facebook and Tesla might jockey for the trillion-dollar prize. But other than those two, are any other S&P 500 stocks anywhere near a trillion? Nothing immediate.
Warren Buffett's Berkshire Hathaway (BRKA) would appear next in line, as its market value is now $657.9 billion. Analysts, though, think even in 12 months time the company will be worth just $730.8 billion, falling shy of the trillion-dollar mark by nearly 40%. Also, it's not a particularly fast grower, so unlikely to surprise much to the upside. Analysts think Berkshire Hathaway's adjusted profit per share will only grow by 6.9% in 2022.
Visa (V) is a likely candidate in due time. The payment processing firm is already worth nearly $500 billion. And its adjusted profit per share is seen jumping 25% in 2022 to $7.26. Even so, analysts don't think it's going to happen anytime soon. Analysts are calling for the stock to inch up just 0.9% in 12 months.
So it seems the world might need to be satisfied with five, or maybe six, trillion dollar companies for some time.
Analysts: The Most Valuable S&P 500 Companies In The Future
Current and projected market values
| Company | Ticker | Stock YTD % ch. | Market value now ($ trillions) | Analysts' 12-month market value target | Sector |
|---|---|---|---|---|---|
| Apple | (AAPL) | 12.0% | $2.5 | $2.7 | Information Technology |
| Microsoft | (MSFT) | 38.5% | $2.3 | $2.5 | Information Technology |
| Alphabet | (GOOGL) | 56.8% | $1.8 | $2.2 | Communication Services |
| Amazon.com | (AMZN) | 1.9% | $1.7 | $2.1 | Consumer Discretionary |
| (FB) | 20.3% | $0.9 | $1.2 | Communication Services | |
| Tesla | (TSLA) | 45.2% | $1.0 | $0.8 | Consumer Discretionary |
| Berkshire Hathaway | (BRKA) | 25.5% | $0.7 | $0.7 | Financials |
| Visa | (V) | 6.9% | $0.6 | $0.6 | Information Technology |
| Nvidia | (NVDA) | 77.4% | $0.6 | $0.6 | Information Technology |
| JPMorgan Chase | (JPM) | 34.5% | $0.5 | $0.5 | Financials |
Sources: IBD, S&P Global Market Intelligence
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October 26, 2021 at 07:00PM
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