These 4 big techs are the exclusive members of the Trillion Dollar Club
The U.S tech sector giants have all crossed $1 trillion valuations as markets try to shrug off geopolitical and other risk events
The Equities have more or less carried the positive sentiment that we saw in the latter half of last year. Global stocks saw broad-based gains led by the American bourse to post record gains. While we have seen a major geopolitical event and a global health scare shaking the markets in 2020, the effects so far have been temporary. The big techs have been the drivers of the longest bull run in American history — they have gotten so big that four of them gave already crossed market caps of over $1 trillion.
Some analysts believe that this insatiable appetite for tech stocks may not be sustainable. This was highlighted in my recent piece on the biggest index funds of the industry being too heavily invested in these big tech companies — comprising almost 20% of the weightage of these index funds. This skewed interest might prove to be fatal were these tech stocks to turn lower for a major correction. For now, though, the investors are basking in the glory of their outperformance.
While the big techs usually steal the limelight, an even bigger story has emerged in the new year — Electric car pioneer Tesla’s stock has shot through the roof on better future guidance & profitability. The stock closed today at $572.20 with a market cap of over $103 billion. Although the valuation may sound minuscule when compared to the big techs, it is certainly impressive considering Tesla has overtaken the big three U.S carmakers and Germany’s Volkswagen ($99 billion) — sitting second only to Japan’s Toyota ($200 billion).
Coming back to the big techs, today’s infographic (top) showcases the four companies that reached a market cap of $1 trillion at some point. Keep in mind, that these valuations can change with the underlying stock price — market capitalization is determined by the total value of a company’s shares of stock that have been purchased by shareholders.
Here are some of the takeaways presented in the infographic — data about the company’s profits and revenue was taken from the Fortune 500 list of 2019:
- Apart from the commonality of their trillion-dollar valuations, all four companies in the group are American-based and from the technology sector.
- Apple with its $1.4 trillion market cap is the star of the club — Not only was the pioneer of the exclusive club, but it also has the highest market cap, revenue, profit, and profit per employee.
- Amazon is still included in the group despite its $0.93 trillion valuation, since it’s market cap hit the magic number of $1 trillion back in Sep. 2018.
- Microsoft is the oldest tech company of the lot with a market cap of almost $1.28 trillion which has grown steadily over the years.
- Google is the newest addition to join the club recently and currently stands at $1.02 trillion.
- Despite being the biggest employer with 648.5K employees & second-highest revenue-generating company ($233 billion), the e-commerce giant posted the smallest profit of $10.1 billion among the lot. It also has the highest-priced stock, closing at $1884.58 today.
The numbers certainly suggest that members of the Trillion dollar club are flourishing but challenges lie ahead for the mega tech corporations. Anti-trust regulations, proposed digital taxation & privacy issues may call the future of the Big Tech into question.