The world’s trillion-dollar market capitalization club began to get crowded with “rookies” from the technology industry.
|Microsoft and Apple are aiming for a market capitalization of 3 trillion USD. Photo: Reuters|
Microsoft recently surpassed Apple and became the most expensive company on the planet. Both “tech giants” (referred to as Big Tech) of the US have a market capitalization of about 2.5 trillion USD.
Alphabet, the parent company of Google, currently has a market capitalization of around $2 trillion, while Amazon is valued at $1.7 trillion. Recently, the world’s trillion-dollar enterprise club welcomed more “rookies” from the US. Billionaire Elon Musk’s electric car company Tesla has surpassed the milestone Market capitalization 1 trillion USD at the end of October and this number continued to increase and now reach 1.250 billion USD.
Thus, the 5 US technology “giants” above have a total market capitalization of nearly 10 trillion USD, accounting for a quarter of the total market capitalization of the S&P 500 index.
It is very likely that the S&P 500 will bring together 6 businesses with a market capitalization of 1 trillion USD or more if Meta, the new name of the social networking giant Facebook, recovers strongly. Meta is currently valued at around $930 billion.
With strength nonstop increase, Alphabet, Amazon, Tesla, and Meta can soon reach a market capitalization of 2 trillion USD or more. Microsoft and Apple alone are approaching the $3 trillion mark.
Meanwhile, the Big Tech in the lower group such as chip maker Nvidia (USA) and Tencent Technology Group (China) are also inching closer to the $1 trillion mark.
In the context of businesses and the global economy struggling because of the Covid-19 pandemic, Big Tech still achieves high profit growth and this makes their shares more expensive.
However, financial analysts warn that the massive influx of money into Big Tech on the Nasdaq is reminiscent of the dotcom bubble of the early 2000s. This could be a dangerous warning signal for the market.
“Tesla’s rally is reminiscent of Cisco’s move in 2000, a move that marked the top of the bubble that year,” said Mike O’Rourke, market analyst at financial brokerage JonesTrading. 2000″. Cisco stock rose about 50% in the first three months of 2000, he said, and at that time analysts at Credit Suisse predicted Cisco would be the world’s first trillion-dollar company.
But that did not happen. At the height of technology stocks two decades ago, Cisco only reached a market capitalization of about $550 billion, and today that number has dropped to $240 billion.
It is proof that technology businesses are very susceptible to usurping market capitalization. In the context of unpredictable market fluctuations during Covid-19, there is no guarantee that companies like Microsoft, Apple, Amazon, Alphabet, and even Tesla can stay at the top for long.
Analysts say that the companies that are born later with newer technology could make the list of the world’s most expensive corporate club memberships in the early 2040s “distort” a lot compared to the previous year. 2021.