Four Largest U.S tech stocks are larger than Japan’s entire Market
Combined market caps of the big techs — Apple, Microsoft, Amazon & Google is larger than Japan’s entire stock market
If there was any sort of convincing V-shaped recovery in the Stock Market, it was evident in the American big tech stocks. This is also highlighted in the tech-focused Nasdaq-100 index, which continues to make new highs. Even during the height of pandemic closures in March, when the stocks turned for the worse, tech stocks held their own. And they led the recovery ever since. Even on days when the Dow has been flat or negative, Nasdaq has been closing up.
The dominance of the big five tech stocks — Apple, Amazon, Microsoft, Google & Facebook is evident from their weightage in the benchmark S$P 500 index. These five companies alone account for 22% of the market weight of the entire index. No wonder then that the broader market moves in the direction of these stocks. You can say that these stocks have become indispensable during times of crisis.
In fact, except Facebook, which has a market cap of about $690 billion at the closing bell today, all the other four have valuations well over a trillion dollars. After an impulsive fall in March on the eve of pandemic lockdown, the tech stocks have shrugged everything to reach an all-time high in valuations (chart above).
Here’s an interesting statistic for you to consider — the collective market cap of the four trillion-dollar valuation club members alone has overtaken the market cap of the entire Japanese stock market, one of the biggest Equity markets in Asia. As of 07/19/2020, the total market cap of the Japanese market stood at $5.838 trillion, compared to a $5.973 Trillion market cap of Apple, Microsoft, Amazon & Google.
If you also add the market cap of Facebook in the total as well, they are comfortably ahead of the Japanese market. These tech companies have become bigger than the GDPs of entire countries — harbingers of the free-market economy or imperialistic capitalism?