Many of the tech giants that have become household names — from Amazon to Nvidia — are members of the trillion-dollar club. This isn’t a real club with membership features and dues, but instead a group of market giants that are each worth more than $1 trillion. Micron Technology was the latest to enter just days ago.
The question is always: Which player will be next? Surprise! It could be a company that isn’t even publicly traded yet. I’m talking about Elon Musk’s SpaceX, which is planning on an initial public offering in a few weeks. The rocket launch giant is aiming for a valuation of nearly $2 trillion — and if that takes shape, it will make history as the biggest IPO ever.
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Let’s take a closer look at this exciting tech and industrial giant that may be next to join the trillion-dollar club.
The early days of the trillion-dollar club
So, first, a quick note about the trillion-dollar environment in general and the importance of valuation. Through the early days of 2018, today’s tech giants each had a market value of less than $1 trillion — Apple became the first trillion-dollar company, at least for a moment, when it reached beyond that level during one trading session later that year.
Progressively, as of 2020, other tech giants now known as the Magnificent Seven reached $1 trillion in market cap, and since that time, each one has surpassed that level — in fact, Nvidia became the first $4 trillion company last year and today tops $5 trillion as the world’s biggest company.
Should you rush to buy shares of a company that’s just reached $1 trillion in market value? Not necessarily. This doesn’t mean the stock will continue to rise and offer you a great return. That said, today’s trillion-dollar companies have one thing in common: They’ve built their successes over time and established strong, profitable businesses. For that reason, each one of these players may be a good stock to buy and hold.
A company such as SpaceX, though an interesting buy for aggressive investors who can handle some risk, differs from today’s trillion-dollar club members because it’s still in its early growth stages. SpaceX might launch with a valuation close to $2 trillion, but many challenges lie ahead — and they could determine whether the company actually maintains such a valuation and grows.
