A group of seven of the most valuable publicly-traded U.S. companies are worth as much as the entire equity markets of Canada, Japan and the U.K. combined.
Apollo economist Torsten Slok illustrated as much in a Tuesday missive to clients and the financial press where he shared a couple of charts meant to illustrate how the group of seven U.S. companies, better known as “the Magnificent Seven,” has come to dominate the landscape of the global equity market.
With a market capitalization of roughly $2.8 trillion, Microsoft Corp., the second-most valuable U.S. stock after Apple Inc., is worth as much as the entire Canadian stock market, according to Slok’s figures.
Microsoft shares have gained 2% since the start of the year, making it one of the better-performing members of the elite group of megacap technology stocks.
APOLLO
To be sure, the extreme divergence between the Magnificent Seven and the rest of the market, a huge topic among investment analysts in 2023, has eased a bit over the past two months.
The ratio between the valuation of the Magnificent Seven and that of the entire Russell 2000
has eased from its record high reached last fall, largely due to a catch-up rally in small-cap stocks that has boosted the Russell 2000 by nearly 19% since Nov. 1, according to FactSet data.
Still, the Magnificent Seven has an aggregate market capitalization of nearly $12 trillion, FactSet data show. That is roughly four times the value of the entire Russell 2000, which consists of 2,000 small-cap companies.
APOLLO
To be sure, members of the Magnificent Seven have seen mixed performance since the start of the year. Tesla Inc.
TSLA,
the group’s worst performer so far in 2024, has seen its shares fall 5.7%, according to FactSet.
Next is Apple Inc.
AAPL,
which is down 4.2% following analyst downgrades. Meanwhile, shares of Nvidia Corp.
NVDA,
the chip maker and artificial-intelligence darling, is up 9.3%.
Other members of the group include Meta Platforms
META,
the owner of Facebook, which is up 1.3% in 2024, Alphabet Inc.
GOOGL,
which has seen its Class A shares gain 0.8%, and Amazon.com Inc.
AMZN,
which is down 0.6%. Microsoft
MSFT
is up 2%.
Every member of the Magnificent Seven ranks among the 10 most valuable companies in the S&P 500 index. Recently, however, Berkshire Hathaway
BRK
surpassed Tesla as the seventh-most valuable company in the index.
