Tesla (NASDAQ: TSLA) is back. Shares of the electric vehicle (EV) maker fell as much as 43% earlier this year. However, the stock has been on a roll since late April, rising more than 130%.
Thanks to the strong recovery, Tesla once again has a market capitalization of more than $1 trillion. I’m not sure how the stock will perform in the future. However, I predict that in ten years the next three stocks will be worth more than Tesla.
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Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is perhaps the easiest choice in my prediction. The conglomerate’s market capitalization of $1.01 trillion is already neck-and-neck with Tesla’s.
How could Berkshire leap past Tesla? Its core businesses – insurance, energy and railways – are a bit like the tortoise in the famous fable of Aesop versus Tesla as the hare. They may not seem that exciting, but they could end up winning the race.
I also fully expect that Warren Buffett and his team will have ample opportunities to put Berkshire’s $325 billion cash hoard to work in the coming years. Buffett isn’t buying many stocks these days because of valuation concerns. However, it’s only a matter of time before a market downturn brings more bargains for the legendary investor to enjoy.
My prediction could fall flat if Tesla’s robotaxi market is as big as Ark Invest CEO Cathie Wood thinks. However, Tesla is a laggard in the market and is far behind Alphabet‘s Waymo unit. Meanwhile, competition in the EV market is also increasing. I think Buffett and Berkshire are safer and more stable than Elon Musk and Tesla.
Broadcom (NASDAQ:AVGO) still has more ground to cover to become bigger than Tesla. However, its market capitalization of approximately $810 billion puts the semiconductor maker within striking distance.
Artificial intelligence (AI) should continue to be a major tailwind for Broadcom. The company’s Ethernet networking equipment and custom AI accelerators are likely to experience strong, growing demand over the next decade. I also expect that Broadcom’s acquisition of VMware will bear good fruit.
Broadcom is one of the most attractively valued AI stocks, with a price-to-earnings-to-growth ratio (PEG) of 1.22, based on five-year growth projections from analysts surveyed by LSEG. By comparison, Tesla’s PEG ratio is a sky-high 9.42.
For my prediction of Broadcom making the leap to Tesla to come true, demand for AI must increase from its current, already high level. However, I think this is a real possibility, especially if major breakthroughs are made in the use of AI tools and perhaps also in artificial general intelligence (AGI).
I happily admit that choice Eli Lilly (NYSE: LLY) Being worth more than Tesla in ten years seems like a tall order. With a market capitalization of approximately $760 billion, the drug manufacturer is well behind Tesla.
But for most of 2024, Lilly was bigger than Tesla. Bad news for the EV maker, combined with good news for Lilly, could turn the picture again. It’s not hard to imagine potential negative developments for Tesla. I think about the failure of the robotaxi market and the declining demand for its vehicles. Identifying potential positive developments for Lilly is also easy.
The most likely good news for the big pharmaceutical company could be rising sales of its drugs against type 2 diabetes and obesity. Mounjaro and Zepbound achieved sales of more than $11 billion in the first three quarters of 2024. GlobalData analysts expect Mounjaro to generate revenues of $34 billion by 2029. That’s more than Lilly’s entire product line last year.
Granted, there’s always a risk that Lilly’s pipeline programs will suffer setbacks. I suspect that my prediction that the company will be bigger than Tesla in ten years will look foolish in retrospect if late-stage candidates such as the experimental oral obesity drug or forglipron fail in clinical trials. However, I am cautiously optimistic that Lilly’s pipeline will fulfill its potential.
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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet and Berkshire Hathaway. The Motley Fool holds positions in and recommends Alphabet, Berkshire Hathaway, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
Prediction: 3 Stocks That Will Be Worth More Than Tesla in Ten Years, originally published by The Motley Fool
