The positive future of the U.S. economy seems promising, according to Jeremy Siegel, emeritus professor of finance at the Wharton School. He believes the economy has achieved a “Goldilocks pace” of growth, with recent data showing a robust job market and steady unemployment rates. Despite concerns about potential inflation from rising wages and geopolitical tensions impacting oil prices, Siegel sees the overall economic landscape as favorable. With this positive outlook, the market will perform well, and now is the time to invest in these three trillion-dollar stocks.
Costco Wholesale (COST)
Costco Wholesale (NASDAQ:COST) is an American warehouse company that retails quality items for a low price. It is a membership warehouse, meaning a customer must buy and hold a Costco membership yearly.
COST’s stock is currently valued at $673.58. It’s worth noting the year is still young, so this isn’t indicative of much. In addition, analysts have projected a 12-month price forecast of $675 and $755.
Costco’s market cap went up from $202.61 billion in 2022 to $292.89 in 2023, representing a growth of 44.56%. COST’s Levered FCF Growth (YoY) reached 261.89% by the end of 2023, nearly 830.92% larger than the sector median of 28.13%. These metrics indicate that Costco is growing steadily while remaining extremely profitable.
COST’s main competitive advantage lies in its membership system, which gives card owners an incentive to continue shopping at Costco. In addition, the company’s bulk sale strategy draws customers shopping for large families. Costco often cuts ties with brands not willing to lower prices in favor of its own brand, Kirkland. That ensures prices are always relatively low. Almost no major retail business has been able to replicate Costco’s model, allowing it to continue dominating the market.
The company’s unique deals and marketing strategies have led to major success, evidenced by its financials. If this growth continues, it could reach a trillion-dollar status in the coming year.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is an American electric car and storage manufacturer that creates products like solar panels, stationary battery storage and cars. TSLA has amassed a valuation of $227.22 with a strong year-over-year valuation increase of 83.89%.
TSLA’s is fully established in the market but shows signs of future growth. Valued at $691.81 billion in 2023, the electric vehicle (EV) market size was estimated at $438.19 billion in 2023 and is projected to reach $1091.1 billion in 2030 at a CAGR of 13.92%.
Financially, TSLA improved on every metric annually. TSLA reported $81.46 billion in revenue for 2022, marking a YoY increase of 51.35%. Net income and EPS also received massive surges of $12.56 billion and $4.07, respectively. Overall, annual financial results proved to be successful for TSLA, with the company outperforming previous years on EBITDA by 84.85%.
TSLA is set up for success through recent announcements of its new vehicles. Tesla recently started shipping the Cybertruck, a long-awaited electric, modern pickup truck. Currently, Tesla’s U.S. market share even tops Volkswagen (OTCMKTS:VWAGY), Subaru and BMW (OTCMKTS:BMWYY). As TSLA continues to include an emphasis on creating quality products, expect TSLA’s valuation to climb as more customers gravitate towards the company’s products and services.
Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semiconductor Manufacturing (NYSE:TSM) is a Taiwanese multinational semiconductor contract manufacturing and design company. Creating products for both commercial uses and consumers, TSM has amassed a valuation of $101.22 with a strong year-over-year valuation increase of 16.34%.
TSM is fully established in the market but shows signs of future growth. Valued at $489.65 billion in 2023, the semiconductor market size overall was $527.88 billion in 2021 and was projected to grow from $573.44 billion in 2022. By 2029, prediction put the market at $1,380.79 billion, exhibiting a CAGR of 12.2% during the forecast.
Financially, TSM improved on almost every metric annually. TSM reported $2.26 trillion in revenue in 2022, marking a YoY increase of 42.61%. Net income and EPS also received massive surges of $1.02 trillion and $39.20, respectively. Overall, annual financial results proved to be successful for TSM, with the company outperforming previous years on EBITDA by 45.57%
TSM is set up for success through its technological advancements. Sources report that TSMC’s main competitor is Samsung. But even that company is far behind in advanced chips and doesn’t have the same capacity as TSMC. Moreover, even though Intel (NASDAQ:INTC) has the advantage of government support, it still can not compete with the experience and expertise of TSMC. As Taiwan Semiconductor continues to emphasize quality products, expect its valuation to climb as more customers gravitate towards its services.
On the date of publication, Michael Que did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
