US tech titans valued at more than most countries’ entire stock markets – Deutsche Bank

America’s seven largest tech companies have larger market capitalizations than companies in nearly every other major economy in the world, CNBC reported on Monday, citing a research note by Deutsche Bank.

According to the bank’s analysts, the combined market capitalization and soaring profits of the so-called Magnificent 7 – Apple, Meta, Amazon, Alphabet, Tesla, Microsoft, and Nvidia – outstrip those of publicly traded firms in nearly every other G20 country. Only China and Japan have larger profits when it comes to their listed companies, the analysts said.

Moreover, the firms’ combined market capitalization alone would make them the second-largest country stock exchange in the world. Microsoft and Apple, for instance, each have market capitalizations that nearly equal the combined value of listed companies in France, Saudi Arabia and the UK.

The analysts based their study on the valuations of 36 companies that have been among the S&P 500’s top five since the 1960s.

While not all of the top earners performed equally well in the stock market in recent months – Tesla’s share price has dropped by some 20% since the start of 2024 whereas Nvidia’s has surged by nearly 47% in that time – “the core of the group have been the largest and most successful companies in the US and with it the world for many years now,” according to Jim Reid, Deutsche Bank’s head of global economics and thematic research.

Stock market returns on the S&P 500 last year were heavily concentrated among the Magnificent 7, whereas many other stocks in the index faced difficulties. However, Deutsche Bank warned that if investors continue to back tech stocks, they may be at a risk of missing other lucrative investment opportunities.

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