Stocks to buy

“Finding the next Google” is a catchphrase among investors who seek to invest in one of the next trillion-dollar companies before they become as influential. However, navigating the stock market and finding such candidates is like finding a needle in a haystack. Even that might be an understatement considering the harsh environment we are in right now and the tough competition in everything tech related.

However, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) itself could be of help here. Its new AI chatbot is trained on a larger database, and experiments show that it has consistently beaten OpenAI’s Bing and ChatGPT at stock picking. Bard is not a seer by any means, but I think the algorithm can find promising candidates who may indeed become one of the next trillion-dollar companies. We will explore these picks and see how realistic they may be.

Finally, I will be excluding the mainstream picks. It is already well known that many of the established names are well on their way to the $1 trillion mark eventually. Thus, discussing them won’t be of much value.

I asked Bard the following: “Hi Bard, I am writing an article for InvestorPlace titled ‘3 Stocks That AI Predicts Can Be the Next Trillion-Dollar Company’ Can you let me know about three lesser-known stocks that you think will join the trillion-dollar club?”

Here’s what Bard picked:

Block (SQ)

Source: Sergei Elagin / Shutterstock.com

Bard: “Block (NYSE:SQ) is a financial technology (FinTech) company that provides a variety of products and services, including a digital payments platform, a peer-to-peer payments app, and a cryptocurrency exchange. Block is one of the leading players in the digital payments space… AI predicts that Block could reach a market capitalization of $1 trillion by 2030.”

Block has taken quite the beating in the past two years and continues to languish below its pre-pandemic peak in 2020. Its larger and more profitable peer, PayPal (NASDAQ:PYPL), has also delivered more or less the same performance in the stock market. However, it is surprising that Bard believes Block could become a trillion-dollar company in seven years, which would take a 27-fold increase from its current market cap. That would take a CAGR of 60.1% over the next seven years.

That’s not impossible, but highly unlikely. Block already has many competitors, and the company would have to deliver eye-watering growth for such a high premium. Still, you can never guess what the market does. Looking at companies like Nvidia (NASDAQ:NVDA) closing in on $1 trillion despite falling sales and profits, Block being worth $1 trillion might be a reality someday.

Snowflake (SNOW)

Source: Sundry Photography / Shutterstock

Bard: “Snowflake (NYSE:SNOW) is a cloud-based data warehousing company that provides businesses with a secure and scalable platform to store and analyze their data. Snowflake is one of the most popular cloud-based data warehousing platforms, and its revenue has grown by more than 100% in each of the past two years. AI predicts that Snowflake could reach a market capitalization of $1 trillion by 2027.”

Snowflake recently plunged by over 13% after the company’s Q1 earnings report. It surpassed expectations for the current quarter by a healthy margin but moved the goal post back for the next quarter.

Investors were already uneasy about the cloud computing market due to the recent slowdown in the sector. Thus, it is understandable that many have jumped ship on lowered expectations.

However, one can never judge what happens in the long run. Cloud computing can very well start rebounding, especially with AI algorithms accelerating in development. Chips and data storage are becoming hot commodities, and Snowflake could be the next company in line to make use of the AI trend.

Regardless, becoming one of the next trillion-dollar companies by 2027 is too rich. Snowflake will have to increase its market cap by 18 times in the next four years to reach that target, and I think that’s simply impossible with the number of competitors in the cloud industry.

Sea Limited (SE)

Source: Postmodern Studio / Shutterstock.com

Bard: “Sea Limited (NYSE:SE) is a Singapore-based e-commerce company that operates Shopee, an online marketplace in Southeast Asia and Taiwan, and Garena, a digital entertainment platform. Sea Limited is one of the fastest-growing companies in the world… AI predicts that Sea Limited could reach a market capitalization of $1 trillion by 2025.”

While I believe Sea Limited is one of the strongest stock picks in terms of upside potential, I disagree that it can reach $1 trillion in less than two years. A $100 billion market cap would be more appropriate for the timeframe.

Just because it’s not becoming one of the next trillion-dollar companies anytime soon, doesn’t mean it is not a buy in my book. Block and Snowflake still have to navigate a lot of headwinds to grow, while Sea can rapidly expand in the developing markets across Asia. It can certainly join the trillion-dollar club in the 2030s and become the Amazon (NASDAQ:AMZN) of ASEAN if it keeps up the growth trajectory.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.

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