Market Prediction: A New Entry in the Race to $1 Trillion
By: Steve Smith
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.
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