It's not an easy matter to make predictions about the stock market, since no one really knows what it will do from day to day or even year to year. (Over long periods, though, it has always gone up.)

Still, I'm here to make a prediction, and I'm predicting that three stocks in particular will be worth more than Costco Wholesale (COST 0.99%) a decade from now. Here's a look at those companies -- and at Costco too.

Image source: Getty Images.

Why Costco?

First off, why am I focusing on Costco? Don't I like it? Well, I do, and I'm a longtime shareholder. But arguably, the stock price has gotten ahead of itself at recent levels. Costco's forward-looking price-to-earnings (P/E) ratio, for example, was recently 50, well above its five-year average of 39. Its recent price-to-sales ratio was 1.53, above the five-year average of 1.08.

With 903 locations worldwide (623 in the U.S. and Puerto Rico) and a recent market value of $428 billion, it may be hard for Costco to grow at a rapid clip. Also, if a widely feared recession happens, maybe Costco will see some customers let their $65-per-year memberships lapse, as they fear spending too much at visits to Costco. (Costco does have lots of great prices, but it can be hard to not spend a lot there.)

Costco has averaged annual gains of around 20% over the past 10 and 15 years. Let's be a little conservative and estimate a 12% growth rate for the coming decade. That would put its market value at $1.3 trillion in a decade.

1. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (TSM 1.16%) is a giant among semiconductor companies.  While most only design chips, Taiwan Semiconductor actually manufactures them. It's the biggest chip maker by far -- with a recent market share of 67%.

There's a lot to like about the company, such as its apparent joint venture with U.S.-based Intel. As there's pressure to make more chips in the U.S., this could benefit both companies. Taiwan Semiconductor has always planned to invest more than $100 billion in U.S.-based plants. Apple is likely to be a major customer of Taiwan Semi's U.S.-built chips. Meanwhile, the company is getting a tailwind from the proliferation of artificial intelligence (AI), as it requires more and better chips.

The company's stock seems reasonably priced at recent levels. Shares have grown in value at an average annual rate of around 20% over the past 10 and 15 years. If they grow by just 10%, that will take the market value from a recent $823 billion to $2.1 trillion.

2. Alphabet

Google parent Alphabet (GOOG -0.09%) (GOOGL -0.01%) is another likely company to be worth more than Costco in a decade. That may not be a surprise, because it's already worth more, with a recent market value of $1.9 trillion. Thus, even if there is a big recession, Alphabet is likely to remain bigger. Better still, it's undervalued, with a recent forward P/E of 16.3 -- well below the five-year average of 22.5. (That's partly due to a recent disappointing earnings report coupled with ambitious spending plans.)

But generous spending plans, if executed well, can lead to further growth, and many still have great expectations for Alphabet -- which owns little enterprises such as YouTube, Nest, and more. There are worries about the government breaking up the company, but there's also its growing AI technology, its forays into healthcare, its robust YouTube business, and perhaps even self-driving taxis.

3. Tencent Holdings

Tencent Holdings (TCEHY -0.39%) isn't a household name, but it's a major enterprise in China, with a recent market value of $513 billion. To out-value Costco in a decade, it will only need to increase in value by a factor of around 2.5 -- or an average annual gain of around 10%. Its performance has been volatile over the past decade, but it has averaged annual gains of 11%. Better still, its stock appears quite undervalued now, with a recent forward P/E of 2.1, well below the five-year average of 7.5.

My colleague Billy Duberstein has dubbed Tencent "arguably China's best technology company," adding:

It owns WeChat, China's dominant 1.39 billion-user social media network; is China's leading mobile game publisher; owns fintech leader TenPay; and is the country's leading video and music streaming platforms. In addition, Tencent is one of China's leading cloud software companies, and is building its own artificial intelligence (AI) large language model, called HunYuan.

The current trade war with China introduces uncertainty into the picture, but Tencent is a powerful conglomerate with many tentacles, and it's been growing. For example, video game revenue rose 23% year over year in the last quarter, and the company's dividend payout was hiked by 32%.

I may well end up being wrong about these predictions, but these three companies seem poised to overtake Costco's value in a decade. (That doesn't mean I plan to sell out of Costco, though, as I plan to remain a long-term shareholder of it.) If any of these businesses intrigue you, dig deeper into them.