Key Points
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All five of the world’s largest companies are technology names.
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The mainstreaming of artificial intelligence has been the key driver of most of their enormous stock price gains.
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Size isn’t everything when it comes to a company, but it’s certainly something. There are some competitive advantages that can only come with size, like more buying power and bigger marketing budgets.
And this got me thinking: Do most investors fully appreciate just how big the world’s biggest publicly traded companies today are? I went digging for these very details. While there was nothing surprising about the names that topped the list, I was blown away by just how big these outfits have gotten, and was in outright awe of how enormous the stock market’s biggest companies have become in such a relatively short time.
The biggest of the big
Cutting straight to the chase, here’s the list, from biggest to least big of the big.
There’s an obvious common thread here: These are all technology companies. This makes sense, of course. Technology is driving the world’s biggest and fastest changes. The companies that have perfected their contribution to the technological landscape are perfectly positioned to gain the most.
That said, it would be wrong to not point out that most of these outfits’ total growth has happened just since the advent of modern-day artificial intelligence. A mere five years ago, for instance, Apple’s market capitalization was just under $2.5 trillion, as was Microsoft’s. Like Amazon’s, Alphabet’s was under $2 trillion in September 2021.
Perhaps the most jaw-dropping growth during this five-year stretch, however, has come from Nvidia, which has expanded more than tenfold from a market cap of just over $500 billion. Give credit to the fact that Nvidia’s processing chips are at the heart of the majority of the world’s AI data centers — an industry that largely didn’t exist until after the public launch of ChatGPT in late 2022.
That being said, although the stock market’s biggest names at any given time have always been considerably bigger than even the next-nearest outfits in terms of total size, the market’s top heaviness has reached shocking levels of late. The five biggest companies now collectively account for 30% of the S&P 500‘s (SNPINDEX: ^GSPC) combined market cap.
And speaking of uncomfortable imbalances, the prolonged gains of the aforementioned tech stocks — along with a bunch of other technology names — have dramatically skewed the S&P 500’s overall sector allocation. Nearly 40% of the index’s current value consists of technology tickers.
Change is inevitable, eventually
Size doesn’t guarantee anything about a megacap company’s future performance, of course, even if it was a strong fiscal performance that resulted in its achieving that size in the first place. Things change, like Nvidia, which displaced Apple as the world’s then-biggest publicly traded company back in 2024.
Two decades ago, oil giant ExxonMobil (NYSE: XOM) was the world’s most valuable company, followed by industrial powerhouse General Electric (before its 2024 breakup). Three decades ago, beverage behemoth Coca-Cola (NYSE: KO) boasted the world’s then-biggest market cap of $130 billion, followed by ExxonMobil, then technology giant Intel (NASDAQ: INTC).
To reiterate, things can and do change.
Things don’t change particularly quickly, though, and they certainly don’t change quickly enough to justify avoiding any given company’s stock simply because it’s the biggest outfit at any given time. Coca-Cola has still performed well since 1996. Ditto for how ExxonMobil has done since 2006.
Nvidia, Amazon, Apple, and all the rest are apt to continue performing well for the foreseeable future, too, even if they will eventually, almost inevitably, fall out of the top five. Indeed, given the artificial intelligence industry’s plans for continued expansion and the subsequently unyielding demand for AI processing chips, Nvidia could conceivably perform well enough to remain in the top five for the foreseeable future before eventually being displaced. It could still be a plenty-bullish ride in the meantime.
In any case, I suspect these five companies will remain in the top 10 for at least the next couple of years, and maybe even the next three to five years, if things go well. Just don’t be surprised if that starts to measurably change after that point.
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James Brumley has positions in Alphabet and Coca-Cola. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Intel, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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