Technology
The Shrinking Trillion Dollar Market Cap Club
The Shrinking Trillion Dollar Club
Aggressive tightening from the Federal Reserve has caused tech stocks to plummet back to Earth in 2022, and this has shaken up the membership of the trillion dollar market cap club.
Here are the four current members of this exclusive club:
| Company | Sector | Date Market Cap Hit $1T | Market Cap (Nov 3, 2022) |
|---|---|---|---|
| Apple (AAPL) | Tech | Aug 2, 2018 | $2.21 trillion |
| Aramco (2222) | Energy | Dec 11, 2019 | $2.01 trillion |
| Microsoft (MSFT) | Tech | Apr 25, 2019 | $1.60 trillion |
| Alphabet (GOOGL) | Tech | Jan 16, 2020 | $1.08 trillion |
Apple, Microsoft, and Aramco are all still well above the $1 trillion mark for now, but Alphabet’s trajectory could take it out of this list if circumstances don’t change soon. Google has indicated that the decrease in crypto advertising has had a big impact on revenue, and ad budgets continue to be slashed as economic uncertainty continues.
Here are the three former members who have seen their market cap dip back below $1 trillion:
| Company | Sector | Date Market Cap Hit $1T | Market Cap (Nov 3, 2022) |
|---|---|---|---|
| Amazon (AMZN) | Tech/Retail | Sep 4, 2018 | $911 billion |
| Tesla (TSLA) | Automotive | Oct 25, 2021 | $675 billion |
| Meta (META) | Tech | Jun 28, 2021 | $236 billion |
Amazon recently became the latest company to fall below the 10-digit threshold. In response to a poorly received earnings report and forecasts for lighter spending this upcoming holiday season, the ecommerce giant has paused corporate hiring for the foreseeable future.
Though Tesla’s valuation has dipped in recent months, Elon Musk remains bullish on Tesla’s prospects, stating the company could eventually be “worth more than Apple and Saudi Aramco combined”. To his credit, Tesla reported record revenues last month.
Diverging Fortunes
Though Apple is down nearly 20% from its peak, the company has faired better than its tech giant peers. In fact, Apple is now worth as much as Amazon, Meta, and Alphabet combined.
Meta, on the other hand, isn’t just going through tough times, it’s the worst performer in the entire S&P 500 this year so far.
Investors are bearish on Mark Zuckerberg’s expensive leap of faith that is the “metaverse” – a virtual reality world that people access via headsets (e.g. Meta Quest). It’s too early to tell whether Meta is on the forefront of the next digital revolution, or embarking on one of the most expensive tech flops in history.
Markets
Charted: What are Retail Investors Interested in Buying in 2023?
What key themes and strategies are retail investors looking at for the rest of 2023? Preview: AI is a popular choice.
Charted: Retail Investors’ Top Picks for 2023
U.S. retail investors, enticed by a brief pause in the interest rate cycle, came roaring back in the early summer. But what are their investment priorities for the second half of 2023?
We visualized the data from Public’s 2023 Retail Investor Report, which surveyed 1,005 retail investors on their platform, asking “which investment strategy or themes are you interested in as part of your overall investment strategy?”
Survey respondents ticked all the options that applied to them, thus their response percentages do not sum to 100%.
Where Are Retail Investors Putting Their Money?
By far the most popular strategy for retail investors is dividend investing with 50% of the respondents selecting it as something they’re interested in.
Dividends can help supplement incomes and come with tax benefits (especially for lower income investors or if the dividend is paid out into a tax-deferred account), and can be a popular choice during more inflationary times.
| Investment Strategy | Percent of Respondents |
|---|---|
| Dividend Investing | 50% |
| Artificial Intelligence | 36% |
| Total Stock Market Index | 36% |
| Renewable Energy | 33% |
| Big Tech | 31% |
| Treasuries (T-Bills) | 31% |
| Electric Vehicles | 27% |
| Large Cap | 26% |
| Small Cap | 24% |
| Emerging Markets | 23% |
| Real Estate | 23% |
| Gold & Precious Metals | 23% |
| Mid Cap | 19% |
| Inflation Protection | 13% |
| Commodities | 12% |
Meanwhile, the hype around AI hasn’t faded, with 36% of the respondents saying they’d be interested in investing in the theme—including juggernaut chipmaker Nvidia. This is tied for second place with Total Stock Market Index investing.
Treasury Bills (30%) represent the safety anchoring of the portfolio but the ongoing climate crisis is also on investors’ minds with Renewable Energy (33%) and EVs (27%) scoring fairly high on the interest list.
Commodities and Inflation-Protection stocks on the other hand have fallen out of favor.
Come on Barbie, Let’s Go Party…
Another interesting takeaway pulled from the survey is how conversations about prevailing companies—or the buzz around them—are influencing trades. The platform found that public investors in Mattel increased 6.6 times after the success of the ‘Barbie’ movie.
Bud Light also saw a 1.5x increase in retail investors, despite receiving negative attention from their fans after the company did a beer promotion campaign with trans influencer Dylan Mulvaney.
Given the origin story of a large chunk of American retail investors revolves around GameStop and AMC, these insights aren’t new, but they do reveal a persisting trend.
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