Tesla(NASDAQ: TSLA) is back. Shares of the electric vehicle (EV) maker plunged as much as 43% earlier this year. The stock has been on a roll since late April, though, soaring more than 130%.
Thanks to the strong rebound, Tesla once again boasts a market cap of over $1 trillion. I'm unsure how the stock will perform going forward. However, I predict that 10 years from now, the following three stocks will be worth more than Tesla.
1. Berkshire Hathaway
Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B) is arguably the easiest pick in my prediction. The conglomerate's market cap of $1.01 trillion is already neck and neck with Tesla's.
How could Berkshire vault past Tesla? Its core businesses -- insurance, energy, and railroads -- are kind of like the tortoise in Aesop's famous fable versus Tesla as the hare. They might not seem as exciting, but they could ultimately win the race.
I also fully expect Warren Buffett and his team to have ample opportunities to put Berkshire's $325 billion cash stockpile to work over the next few years. Buffett isn't buying many stocks these days because of valuation concerns. It's just a matter of time, though, before a market downturn creates more bargains the legendary investor could like.
My prediction could fall flat on its face if Tesla's robotaxi market is as huge as Ark Invest CEO Cathie Wood thinks. However, Tesla is a laggard in the market, trailing well behind Alphabet's Waymo unit. Meanwhile, competition in the EV market is also increasing. I think Buffett and Berkshire are safer, steadier bets than Elon Musk and Tesla.
2. Broadcom
Broadcom (NASDAQ: AVGO) has more ground to cover to become larger than Tesla. However, its market cap of around $810 billion puts the semiconductor maker within striking distance.
Artificial intelligence (AI) should continue to serve as a major tailwind for Broadcom. The company's ethernet networking equipment and custom AI accelerators will likely enjoy strong, growing demand over the next decade. I look for Broadcom's acquisition of VMware to pay off handsomely, too.
Broadcom is one of the most attractively valued AI stocks, with a price-to-earnings-to-growth (PEG) ratio 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 about Broadcom leapfrogging Tesla to come true, AI demand must increase from the current already high level. I think that's a real possibility, though, especially if key breakthroughs are made in the use of AI agents and perhaps in artificial general intelligence (AGI).
3. Eli Lilly
I'll readily admit that picking Eli Lilly(NYSE: LLY) to be worth more than Tesla in 10 years appears to be a stretch. The drugmaker's market cap of around $760 billion puts it well behind Tesla.
Throughout most of 2024, though, Lilly was bigger than Tesla. Some bad news for the EV maker combined with good news for Lilly could flip the picture once again. It's not hard to envision potential negative developments for Tesla. Failure in the robotaxi market and declining demand for its vehicles come to mind. Identifying possible positive developments for Lilly is easy, too.
The most likely good news for the big pharma company could be skyrocketing sales of its type 2 diabetes and obesity drugs. Mounjaro and Zepbound raked in sales of over $11 billion in the first three quarters of 2024. GlobalData analysts expect Mounjaro to generate sales of $34 billion by 2029. That's more than Lilly's entire product lineup made last year.
Granted, there's always a risk that Lilly's pipeline programs could experience setbacks. I suspect my forecast that the company will be larger than Tesla 10 years from now will look silly in retrospect if late-stage candidates, such as experimental oral obesity drug orforglipron, flop in clinical testing. However, I'm cautiously optimistic that Lilly's pipeline will fulfill its potential.
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Suzanne Frey, an executive 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 has positions in and recommends Alphabet, Berkshire Hathaway, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
