It wasn’t too long ago that a billion-dollar company was unimaginable. Today, the business landscape is riddled with companies pulling in not just billion-dollar valuations, but billion-dollar revenues on a quarterly basis. The times have certainly changed, and with the help of inflation, globalization, and increased levels of human capital and technology, it’s almost underwhelming to hear that there’s a new billion-dollar company in play.
But to steal a quote from Justin Timberlake’s character in the movie The Social Network, in which he portrays entrepreneur Sean Parker, “A million dollars isn’t cool. You know what’s cool?”
“A billion dollars,” replied Andrew Garfield, portraying Facebook co-founder Eduardo Saverin.
Here, watch the exchange for yourself:
But in modern history? No company has come close. Not yet, anyway.
As of right now, Apple is the world’s most valuable company with a $700 billion market capitalization. A market capitalization, per Investopedia, is the summation in total dollar amount that all of a company’s outstanding shares add up to. It’s a different way of looking at how big a business is, rather than simply using revenue or profit data. It’s a good way to compare and contrast the size and scope of different companies. For that reason, it will help us figure out which modern company will crack the $1 trillion market cap ceiling first.
And that’s what we’re here to do — figure out which company will win the race to $1 trillion. There are lots of contenders, but the following five likely have the best shot, and the biggest head-start.
It only makes sense that Warren Buffett’s company would be in a prime position to make business history. Berkshire-Hathaway is a bit different than the other companies on this list in that it is not a tech or energy company, and does not really have a direct role in many people’s lives. It’s an older company as well, and there are probably a lot of people who have no idea what it actually does. (It acts as a holding company for many other businesses, including insurance, restaurants, airlines, and many others).
Regardless, Berkshire-Hathaway’s recent market cap has been pegged at roughly $350 billion, about a third of the way to a trillion. And it’s built that valuation the hard way, over decades of slow but steady growth. If the company continues down that path, there’s little doubt that eventually they’ll hit the storied $1 trillion mark. The question is, will the younger, flashier companies get there first?
Speaking of younger and flashier, Google hits those two descriptions on the nose. The search giant is not yet 20 years old but has already had an immense impact on the world, continuing to do so with its new products and experimental projects. Google has also been able to vault from relative nothingness to one of the world’s most valuable companies over the past decade alone, thanks in large part to its prime position as the go-to search engine for a huge number of Internet users.
The key to Google’s continued growth and prospective $1 trillion valuation will be its ability to keep diversifying and pushing the envelope, in a technological sense. The search business will always be there — it’s what else the company can do that will really send its market cap into the stratosphere. Currently, Google is worth between $375-$400 billion, give or take a few billion. To reach the next echelon, however, it has some catching up to do.
3. Exxon Mobil
When you are in control of a vast amount of the world’s energy supply, you’re definitely going to be highly-valued. Exxon Mobil is exactly that, with a market cap floating around the same range as Google’s in the $350-$400 billion range. But Exxon Mobil is different from the other companies included on our list in that it is an energy company, and is prone to different market ebbs and flows in the market as well as by things like tax rates and strict regulation.
In fact, you could say that Exxon Mobil’s future is largely in the hands of its customers and the governments that run the various countries around the world. While Exxon Mobil will almost certainly continue to make gobs of money for the foreseeable future, unless the company diversifies or redirects in some way, it could see revenues decline at some point. The question is, will it have topped $1 trillion by the time that happens? When gas prices spike back up, which they will, we’ll get a real look at the company’s chances of hitting the threshold.
Microsoft is huge. It has its fingers in a ton of different industries, and in many respects has created the computing backbone that has allowed for thousands of other businesses to flourish. It’s also waded into new territory over the past several years to explore video games, communication, search engines, and more, but the company’s bread and butter has always been software. And software is probably where it will see its best chance at reaching $1 trillion.
The Redmond-based behemoth is currently the second most valuable company in the world, with a market cap of just under $400 billion. Microsoft has relatively new CEO in Satya Nadella, who could be looking to expand the company’s revenues even further through a mix of revamped classic products and completely new offerings. Whether those things play out, and if they add enough value to get Microsoft to the $1 trillion valuation level, has yet to be seen.
If there’s one company that definitely has a realistic chance of reaching $1 trillion, it’s Apple. With a market cap of more than $700 billion, it’s worth double that of Exxon or Google, and there’s really no reason to think it will slow down. You could even say that it’s only a matter of time before Apple does hit the mark. It was only in 2011 that Apple crossed the $300 billion mark, and they’ve more than doubled in the past four years alone. That’s some insane growth.
With a swath of new products like the Apple Watch starting to hit stores, as well as the continued release of classics like the iPhone, iPad, and Macbooks, it’s hard to think Apple won’t be the first company to get to $1 trillion. Unless something seismic happens in the tech industry, Apple’s likely going to get there first — and make history when it does.
Follow Sam on Twitter @Sliceofginger