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The trillion-dollar market cap club expanded last week to a third U.S. company, with Google parent Alphabet Inc. topping the lofty valuation mark. Adding the next member, however, is likely to take a while.

Apple Inc. and Microsoft Corp. are also worth more than US$1-trillion on the stock market. And while Amazon is currently worth around US$935-billion, the e-commerce leader did cross the trillion-dollar threshold briefly in September 2018.

The next closest company is not within US$300-billion of the mark, but a handful companies could contend based on their current values.

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Social media platform Facebook Inc appears to have the pole position. Its US$630-billion market value is about US$65-billion more than Berkshire Hathaway Inc, the next richest company in the S&P 500.

But a lot can happen between now and US$1-trillion, and investors asked to handicap the field revealed different choices among the S&P 500 for which U.S. company will be the fifth member of the elite club. The next to join also may not yet be on anyone’s list.

The following are among the top contenders to crack the US$1-trillion market valuation mark:

FACEBOOK (Current market cap: US$627-billion)

The social media company’s stock price soared about 50 per cent in the past year, and while past performance is no predictor, Facebook would top US$1-trillion in just over a year if it keeps up that pace.

To get there, Facebook “must demonstrate the ability to monetize its user base beyond just selling ads,” King Lip, chief strategist at Baker Avenue Wealth Management, said in an email.

Greater scrutiny of tech companies over privacy and data policies could limit Facebook’s growth and stock valuation, according to investors.

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Facebook is poised for above-market growth, said Margaret Reid, senior portfolio manager at The Private Bank at Union Bank. But “that trillion dollar market cap might be further out the spectrum because of the regulatory environment for these technology platform companies,” she added.

BERKSHIRE HATHAWAY (US$561-billion)

Shares of Warren Buffett’s conglomerate climbed more slowly than the broader market over the past few years, with its Class A shares up 11 per cent in 2019 against a gain of nearly 29 per cent for the S&P 500.

Berkshire’s “growth rate is less exciting, their valuation less likely to expand meaningfully,” according to emailed comments from Jason Ware, chief investment officer with Albion Financial Group, who called the diversified company’s earnings power and economic competitive advantages “airtight.”

“They’ll likely hit $1-trillion eventually, but they are the tortoise in this story.”

Visa Inc. (US$446-billion)

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Soaring stock prices have propelled Visa Inc. and rival payments processing company Mastercard Inc. up the market cap chart.

Both could surpass Facebook in market value three years from now, if all three companies maintained their average annual stock price increases of the past three years.

With Visa shares trading at over 30 times forward 12-month earnings estimates and above their 10-year average market premium, according to Refinitiv Datastream, some investors are wary about its valuation.

Albion’s Ware said Visa’s dominance in the credit and debit markets “has afforded them highly visible recurring revenues and earnings and thus a stable market premium.”

If Visa’s P/E ratio stays stable or expands, Ware said, the company could reach US$1-trillion “before many might expect.”

JP MORGAN ($428 billion)

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JP Morgan Chase & Co. ranks as the largest U.S. bank by market value by well over US$100-billion. Paul Nolte, portfolio manager at Kingsview Investment Management, said in an email that the bank could grow even bigger.

“There will be some legislative issues with a very large JP Morgan,” Nolte said. “But continued consolidation within the banking sector along with international competition could push the large to get even larger.”

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