The world of energy is changing. Electrification is in, and gas engines are on the way out. This presents a major risk for Ford Motor(NYSE: F). The American automotive stalwart is pushing into electric vehicles, but it has failed to make the segment profitable in the face of rising costs, upcoming tariffs, and major competition from pure-play electric vehicle manufacturers and other global brands.
At a market cap of $41 billion, I think Ford Motor is in for a tough ride over the next decade as it faces increasing competition globally amid the transition to electric vehicles. Here are two stocks of varying size and risk I think can be larger than Ford Motor 10 years from now.
Building and launching rockets
First up is a company with a much smaller market cap than Ford today: Rocket Lab(NASDAQ: RKLB). This space flight upstart has a market cap of $9.5 billion, but I think it has a chance to head much higher in the next 10 years for patient investors.
The company will generate around $500 million in revenue this year, which is a tiny figure compared to Ford's revenue of over $100 billion. However, smart investors know it is about the future, not the past. Rocket Lab's revenue is up 680% since the company went public in 2021, an impressive feat that makes it one of the fastest-growing businesses in the world.
The company operates the small Electron rocket, which is one of the only rockets outside of SpaceX to reliably launch products for commercial customers. It has launched five times already in 2025 and is consistently booking new contracts from customers that enjoy the reliability and frequency of Electron launches. The Space Systems segment, where Rocket Lab builds and sells products like satellites and solar arrays to customers, generates the rest of the revenue. This vertical integration has helped Rocket Lab win contracts over the competition.
Over the long term, Rocket Lab plans to begin launching its larger Neutron rocket and add-on software and services products to sell to customers. The Neutron rocket will have a much larger payload than the Electron, which means much more revenue potential. All in all, Rocket Lab has a huge opportunity to keep growing and capture more share in the space economy, which is expected to grow into a $1 trillion industry in the near future.
As the company's revenue keeps climbing higher, over the next 10 years, it has a chance to reach $10 billion in revenue and be valued at a market cap more than Ford. It is riskier than my next stock, but Rocket Lab has a ton of potential for patient investors who buy today.
Image source: Getty Images.
Growth in electricity demand
Electricity demand in the United States is increasing due to the aforementioned transition to electric vehicles and the growth in electricity needs from artificial intelligence (AI) services. OccidentalPetroleum(NYSE: OXY) is a cheap stock ready to take advantage of this trend. Plus, its largest shareholder is Berkshire Hathaway, which owns 28% of its stock.
Occidental Petroleum is a producer of oil and natural gas plus an operator of midstream services (transportation of petroleum products) and chemical production. While the world is slowly transitioning to more renewable energy, demand for natural gas should rise as it replaces coal usage around the world. Petroleum is used in many more products than just transportation and electricity generation too.
With a market cap of around $42 billion, I think Occidental Petroleum can be a stable stock to own in a portfolio and will do much better than Ford over the next 10 years. It generated $4.4 billion in free cash flow over the last 12 months, which has been declining due to lowered oil prices. This is less than 10 times its market cap. Management is consistently paying down debt to clean up the balance sheet and returning capital to shareholders.
The stock has a dividend yield of 2.3%, providing some nice income to shareholders. Ford's dividend yield at over 5% is higher, but I believe it is at a much higher risk of getting cut with the competitive pressures of its industry. In 2026 and 2027, Occidental Petroleum management believes it will see a $1 billion-plus incremental increase in free cash flow, thanks to improvements in the midstream and chemicals subsidiaries. That would bring its free cash flow above $5 billion annually, which will give it plenty of cash to pay down debt and grow the dividend.
If the price of oil rises, free cash flow can get closer to $10 billion a year, which would be a dirt cheap multiple for a stock with a market cap of $42 billion today. Compared to Ford, I believe Occidental Petroleum can generate a huge percentage of its market cap in cash flow over the next 10 years, perhaps even more than its current market cap. For that reason, I think Occidental Petroleum will be a larger stock in 10 years while Ford struggles.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool recommends Occidental Petroleum and Rocket Lab USA. The Motley Fool has a disclosure policy.
