Market Prediction: A New Entry in the Race to $1 Trillion

Posted On May 14, 2018 11:59 am

One of the popular, and highly profitable, parlor games on Wall Street is predicting which company will be the first to achieve a $1 trillion market capitalization. Today, we’ll look at an unusually bold market prediction. But first, the conventional players.

The odds-on favorite is Apple (AAPL) simply due its proximity; at $190 per share, it is just a mere 4.2% or $40 billion away.

Amazon (AMZN) would be the next best bet with a current $790 billion market cap but far superior growth prospects.

Google (GOOGL) and Facebook (FB) have the size and reach but may be hitting a regulatory wall.

But Professor Scott Galloway, who has positioned himself as the premier expert on FANG related stocks with his book The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, recently posited that music streaming company Spotify (SPOT) could be a candidate for the trillion dollar club.

Spotify, which went public last month and currently has about a $30 billion valuation, would seem to be a long shot, but if Galloway is right that would mean you’d be looking at a 32,000% gain!

Galloway acknowledges it would take years for SPOT to reach the goal but the best investments, and the hardest to come by, are those identified early and held for the long term.  And if you’d be satisfied with 100% Galloway predicts SPOT’s shares will double within the next 12-18 months.

He makes his case here:

Since the Great Recession, the Four – Amazon, Apple, Facebook, and Google – have amassed a combined market cap greater than the GDP of France. The accretion of stakeholder value (for consumers, investors, and employees) is staggering. If we could suss out the underpinnings of these horsemen, we could focus governments and universities on investing in the infrastructure that blooms these attributes (great engineering schools, bankruptcy laws, after-school music programs). And we’d be better stock pickers.

 Related: Here’s Why You Shouldn’t Worry About Treasury Yields

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.