One of the most notable transitions in recent decades has been the ascent of technology purveyors among the world's most valuable companies. It was just two decades ago that industrial and energy stalwarts General Electric and ExxonMobil topped the list in terms of market cap, valued at $319 billion and $283 billion, respectively. Now, just 20 years later, it's technology that dominates the list.

Leading the way are three of the most recognizable tech companies in the world. Apple currently tops the list at $3.4 trillion. Microsoft and Nvidia are close behind, each valued of $3 trillion.

With a market cap of just $1.3 trillion, it might seem premature to suggest that Meta Platforms (NASDAQ: META) is on track to join the $3 trillion club. However, the stock has gained 163% over the past year and 495% over the past five years (as of this writing), driven by strong operating results that should continue.

Meta has several distinct advantages, and its ever-expanding social media empire, market dominance, and strategic adoption of AI could drive its membership in this elite fraternity.

An ongoing and robust recovery

While Meta Platforms was punished during the economic downturn, the stock has come roaring back, propelled higher by impressive financial results. In the second quarter, revenue of $39 billion climbed 22% year over year, while diluted earnings per share (EPS) of $5.16 jumped 73%.

The financial results were driven by solid user metrics. The number of people who paid daily visits one of Meta's family of social media sites -- which includes Facebook, Instagram, Threads, and WhatsApp -- grew to 3.27 billion, up 7% year over year.

Helping fuel the robust results was the ongoing rebound in online marketing, which is improving thanks to gains in the overall economy. Meta's social media ecosystem plays host to the company's digital advertising.

The online ad arena is dominated by the industry's two leading players. In 2023, Alphabet 's Google controlled an estimated 39% of the worldwide digital ad revenue, followed by Meta with 18%, according to data compiled by business intelligence platform Statista.

As the world's second-largest digital advertiser, Meta Platforms is well positioned to reap the benefits of the rebound, which could be substantial.

Multiple growth drivers

Worldwide ad spending is expected to rise by 8% to more than $1 trillion in 2024, according to ad industry researcher WARC Media. Social media is expected to be the fastest-growing medium in digital advertising, capturing nearly 22% of total ad spending, according to the report. It goes on to say that Meta is "on course to record oversized gains in the coming months."

Beyond advertising, however, is Meta's strategy to profit from the windfall of artificial intelligence (AI). The company has leveraged the data it captures from the billions of users on its social media platforms to develop its own state-of-the-art large language models, which forms the foundation of generative AI.

The result is Llama (Large Language Model Meta AI), which feeds its flagship Meta AI chatbot. Earlier this year, the company unveiled Llama 3, declaring Meta AI as "one of the world's leading AI assistants." The company made this system free to individual users (collecting even more data) while it charges the largest cloud infrastructure providers for the privilege of including it in their offerings.

While there's a great deal of emphasis on AI, it isn't the only growth driver that could push Meta higher. Meta's Reality Labs -- home of its Oculus virtual reality (VR) business, Quest VR headsets, and its ever-changing metaverse blueprint -- has had little to show for its efforts thus far. However, CEO Mark Zuckerberg is convinced these investments will bear fruit, ultimately boosting Meta's profits.

Given the rebounding ad market, multiple growth drivers, and the tailwinds driving generative AI, it shouldn't take long for Meta Platforms to earn its membership in the $3 trillion club.

The path to $3 trillion

Meta currently boasts a market cap of roughly $1.35 trillion, which means it will take stock price gains of roughly 123% to drive its value to $3 trillion. According to Wall Street, Meta is expected to generate revenue of $161.6 billion in 2024, giving it a forward price-to-sales (P/S) ratio of roughly 8.3. Assuming its P/S remains constant, Meta would have to grow its revenue to roughly $360 billion annually to support a $3 trillion market cap.

Wall Street is currently forecasting revenue growth for Meta of 14% annually over the next five years. If the company achieves that benchmark, it could achieve a $3 trillion market cap as soon as 2031. It's worth noting that Meta has grown its annual revenue by nearly 1,000% over the past decade, so those expectations could well be conservative.

Furthermore, at 27 times earnings, Meta is selling for a discount compared to a multiple of 29 for the S&P 500 . That's an attractive price to pay for a company with a dominant market share, strong momentum, and multiple ways to win.

Before you buy stock in Meta Platforms, consider this: