Brokers & FinTech, Markets & Investing
Market Value of S&P 500 Top 10 Companies Swells to $8T as Investors Flock to Big Tech
10 Sept 2020
According to the research data analyzed and published by StockApps, the collective market cap of the top 10 companies on the S&P 500 as of mid-August 2020 had reached $8 trillion.
Of these, the top 5 companies collectively increased by 37% from January to the end of July 2020. During the same period, all other S&P stocks declined a collective -6%.
Five Tech Giants Constitute 20% of Total Stock Market Worth
Apple leads the pack with a market cap of $2.1 trillion. Despite supply chain issues hurting the firm early in the pandemic, Apple’s earnings have proved resilient and the company has been caught up in the broader rally, boosting technology shares. Apple’s share price is up 57.6% year-to-date and 118% over the past 12 months, and it now occupies a 7% weighting in the S&P 500 index – which has a total market cap of $27trn.
In the midst of an economic crisis, how did Apple reach such a high market valuation? Apple’s earnings report from Q2 of 2020 highlighted an 11pc increase in revenue on the same quarter last year. Apple reached revenue of $59.7bn, with international sales accounting for 60pc of that.
Microsoft and Amazon take second and third place with $1.7 trillion and $1.4 trillion, respectively. Facebook is fourth with $700 billion and Alphabet Inc. Class A is fifth with $488.9 billion. In mid-August 2020, these five companies constituted 20% of the total worth of the stock market. According to Goldman Sachs Global Investment Research, Amazon recorded the best YTD performance as at the end of July. While it was up 70%, Apple and Microsoft were up 33% each. Facebook and Alphabet were up 18% and 16%, respectively.
In Q2 2020, four of these tech giants added $200 billion to their collective market cap. Apple and Amazon each added about $74.4 billion. Facebook added $42.6 billion and Alphabet, $7.6 billion. Each of them surpassed expectations in terms of revenue and earnings per share (EPS).
Notably too, Facebook, Amazon and Alphabet own the most visited websites in the United States. According to SimilarWeb, March 2020 saw a 15% upsurge on Facebook website visits and 10% on YouTube. Moreover, during Q2, Facebook reported a 12% increase in daily and monthly active users. Synergy Research also reveals that during the same quarter, global spending on cloud computing increased by 33% and surpassed $30 billion.
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