A Visual History of the Largest Companies by Market Cap
The macro narrative that underlies the market is constantly under revision.
While this is partially a function of shifts in investor sentiment, it’s also driven by game-changing events as well as much more structural market forces.
For example, how does the macro narrative change after a commodity price crash? What about when the unprecedented scale of technology is truly understood by the market?
An Evolving Narrative
In this week’s chart, we look at how the big picture narrative has changed over time by using a very simple approach.
We have visualized the market capitalizations of the 10 largest public companies in the world over five-year intervals from 1999 until today, and it gives us a series of snapshots of what the market was “thinking” during these specific periods.
Not only is it evident as certain industries rise to prominence, but there are also some interesting individual stories to follow. We can see iconic companies – such as Apple – ascend into the public consciousness, while others fall off the radar completely.
|Year||Description||Top Company||Who Dominates Top 10?|
|1999||Dotcom Bubble||Microsoft ($583B)||Five tech companies in the mix|
|2004||Post-Bubble||GE ($319B)||Diverse mix of companies by industry|
|2009||Financial Crisis||PetroChina ($367B)||Six non-U.S. companies make list|
|2014||$100 Oil||Apple ($560B)||Last year for oil companies, tech starts ascending|
|2019||Big Tech Era||Microsoft ($1,050B)||Seven companies are tech|
The composition of the top 10 changes in each of the snapshots above, and this simple approach helps capture the market narrative for each timeframe.
During the Dotcom Bubble, you can see that half of the list was dominated by tech companies. This was short-lived, and the years 2004, 2009, and 2014 have much more diverse lists.
You can also see the impact of the financial crisis on U.S. company valuations. In 2009, there is an equal distribution of Chinese and American companies. Royal Dutch Shell (UK/Netherlands) and Petrobras (Brazil) help round out the top 10.
Finally, over the last five years, you can see the impact of lower oil prices and the growing scale of tech. Back in 2014, Exxon Mobil was the second largest company in the world by a solid margin, but today it’s been displaced by companies like Facebook, Amazon, Tencent, and Alibaba.
The Big Tech Era
Here is the current top 10 list of the world’s largest companies by market cap:
|#1||🇺🇸 Microsoft||Tech||$1,050 billion|
|#2||🇺🇸 Amazon||Tech||$943 billion|
|#3||🇺🇸 Apple||Tech||$920 billion|
|#4||🇺🇸 Alphabet||Tech||$778 billion|
|#6||🇺🇸 Berkshire Hathaway||Diversified||$507 billion|
|#7||🇨🇳 Alibaba||Tech||$435 billion|
|#8||🇨🇳 Tencent||Tech||$431 billion|
|#9||🇺🇸 Visa||Financial||$379 billion|
|#10||🇺🇸 Johnson & Johnson||Consumer Goods||$376 billion|
In total, the five biggest tech giants brought in a combined $801.5 billion in revenue last year, and $139 billion in net income.
The Staying Power of Microsoft
With a valuation today of just over $1 trillion, Microsoft is again the world’s largest company by market capitalization.
In this way, the above lists come full circle, since Microsoft was also the biggest company in 1999.
While the software giant experienced short periods where it did drop out of favor, Microsoft was the only company to make the list in our five snapshots above.
Visualizing the Biggest Risks to the Global Economy in 2020
The Global Risk Report 2020 paints an unprecedented risk landscape for 2020—one dominated by climate change and other environmental concerns.
Top Risks in 2020: Dominated by Environmental Factors
Environmental concerns are a frequent talking point drawn upon by politicians and scientists alike, and for good reason. Irrespective of economic or social status, climate change has the potential to affect us all.
While public urgency surrounding climate action has been growing, it can be difficult to comprehend the potential extent of economic disruption that environmental risks pose.
Front and Center
Today’s chart uses data from the World Economic Forum’s annual Global Risks Report, which surveyed 800 leaders from business, government, and non-profits to showcase the most prominent economic risks the world faces.
According to the data in the report, here are the top five risks to the global economy, in terms of their likelihood and potential impact:
|Top Global Risks (by "Likelihood")||Top Global Risks (by "Impact")|
|#1||Extreme weather||#1||Climate action failure|
|#2||Climate action failure||#2||Weapons of mass destruction|
|#3||Natural disasters||#3||Biodiversity loss|
|#4||Biodiversity loss||#4||Extreme weather|
|#5||Humanmade environmental disasters||#5||Water crises|
With more emphasis being placed on environmental risks, how much do we need to worry?
According to the World Economic Forum, more than we can imagine. The report asserts that, among many other things, natural disasters are becoming more intense and more frequent.
While it can be difficult to extrapolate precisely how environmental risks could cascade into trouble for the global economy and financial system, here are some interesting examples of how they are already affecting institutional investors and the insurance industry.
The Stranded Assets Dilemma
If the world is to stick to its 2°C global warming threshold, as outlined in the Paris Agreement, a significant amount of oil, gas, and coal reserves would need to be left untouched. These assets would become “stranded”, forfeiting roughly $1-4 trillion from the world economy.
Growing awareness of this risk has led to a change in sentiment. Many institutional investors have become wary of their portfolio exposures, and in some cases, have begun divesting from the sector entirely.
The financial case for fossil fuel divestment is strong. Fossil fuel companies once led the economy and world stock markets. They now lag.
– Institute for Energy Economics and Financial Analysis
The last couple of years have been a game-changer for the industry’s future prospects. For example, 2018 was a milestone year in fossil fuel divestment:
- Nearly 1,000 institutional investors representing $6.24 trillion in assets have pledged to divest from fossil fuels, up from just $52 billion four years ago;
- Ireland became the first country to commit to fossil fuel divestment. At the time of announcement, its sovereign development fund had $10.4 billion in assets;
- New York City became the largest (but not the first) city to commit to fossil fuel divestment. Its pension funds, totaling $189 billion at the time of announcement, aim to divest over a 5-year period.
A Tough Road Ahead
In a recent survey, actuaries ranked climate change as their top risk for 2019, ahead of damages from cyberattacks, financial instability, and terrorism—drawing strong parallels with the results of this year’s Global Risk Report.
These growing concerns are well-founded. 2017 was the costliest year on record for natural disasters, with $344 billion in global economic losses. This daunting figure translated to a record year for insured losses, totalling $140 billion.
Although insured losses over 2019 have fallen back in line with the average over the past 10 years, Munich RE believes that long-term environmental effects are already being felt:
- Recent studies have shown that over the long term, the environmental conditions for bushfires in Australia have become more favorable;
- Despite a decrease in U.S. wildfire losses compared to previous years, there is a rising long-term trend for forest area burned in the U.S.;
- An increase in hailstorms, as a result of climate change, has been shown to contribute to growing losses across the globe.
The Ball Is In Our Court
It’s clear that the environmental issues we face are beginning to have a larger real impact. Despite growing awareness and preliminary actions such as fossil fuel divestment, the Global Risk Report stresses that there is much more work to be done to mitigate risks.
How companies and governments choose to respond over the next decade will be a focal point of many discussions to come.
The Sum of Its Parts: The Smartphone Multiplier Market
Every day, 3.3 billion people rely on their smartphones to stay connected. The products and services enabling this—the smartphone multiplier market—is now worth $459 billion.
The Sum of Its Parts: The Smartphone Multiplier Market
There’s a 60% chance you’re reading this article on a smartphone right now—a testament to how ubiquitous these devices have truly become in our lives.
We rely on smartphones every waking minute to stay connected. However, the various products and services—also known as the smartphone multiplier market—that allow us to use these devices in the first place can often be an afterthought.
Today’s chart uses data from Deloitte Insights to show just how sizable this ecosystem is becoming, and why it’s heating up as a battleground for big technology companies such as Apple, Alphabet, and Amazon.
The Smartphone Plateau
There are over 3.3 billion smartphone users in the world today.
The smartphone economy—estimated to pull in $944 billion in total revenue in 2020—is so massive that it rivals the GDP of countries like Indonesia and the Netherlands.
At the moment, the smartphones themselves contribute over half the market value. Despite the continued hype surrounding the release of new models, global unit shipments of smartphone devices appears to have reached a saturation point:
There are two theories as to why shipments are leveling off. First, product innovation is more iterative today than in the past, which means there are fewer groundbreaking features to entice consumers into purchasing new devices. A second factor is that people are simply holding onto their devices for longer than in the past.
As device sales plateau, tech giants are diversifying efforts to find new ways to lure customers back in—and another related market is growing more lucrative as a result.
What is a “Smartphone Multiplier”?
When people think of the smartphone market, hardware likely springs to mind first, but an equally important part of the equation is the plethora of apps, services, accessories, and complementary devices that help us connect with the digital world.
The ecosystem of these products and services are known as smartphone multipliers. According to Deloitte, this ecosystem will drive $459 billion of revenues in 2020, an impressive 15% increase from the prior year.
The market can be broken down into three main categories:
|Category||Market Value (2020e)||Sub-categories|
(68% of total)
|$176B: Mobile ads
(24% of total)
$9B: Smart speakers
(8% of total)
Largely driven by mobile advertising and app sales, content is by far the largest subcategory, accounting for 68% of revenues:
- Mobile advertising surpassed TV as the largest advertising channel in 2019, partially thanks to the relentless growth of online video and social media, making ads virtually unavoidable on a smartphone.
- Gaming apps are benefiting from the immense processing power of today’s smartphones—and will bring in over two-thirds of total app revenue in 2020. Apple’s app store brought in approximately $1.8 billion in sales between Christmas Eve and New Year’s Day alone.
If you’ve ever owned a pair of headphones or a powerbank, it’s easy to understand why accessories are the third-largest subcategory in the smartphone multiplier market. With more people ditching the cable for wireless headphones, this subcategory is also set to grow even more.
The Next $1T Economy?
In the U.S., 73% of adults go online several times a day or almost constantly, which makes it clear that they aren’t going to give up their smartphones anytime soon.
As a result, smartphone multipliers will continue to evolve and flourish, presenting a unique opportunity for investors and businesses.
Altogether, it’s expected that the smartphone multiplier market will grow between 5 and 10% annually through 2023, likely propelling the entire smartphone economy past the $1 trillion benchmark in the coming years.
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