Big Tech, Elon Musk, Tesla, CiscoEven as the new regulatory regime across the globe keeps the Big Tech on its toes, cloud software giant Microsoft has piped Apple to emerge as the world's most valuable company with a total valuation of both ballooning to about $2.5 trillion.
According to a recent report analysing the net worth of Big Tech companies, Google owner Alphabet is worth just a touch less than $2 trillion, while Amazon is valued at $1.7 trillion. Tesla, Elon Musk's electric car giant recently passed the $ 1 trillion mark and has since surged to a market cap of about $1.25 trillion.
As per the report the top five US tech companies collectively now stand at a new worth of about $10 trillion. “That's nearly a quarter of the combined $41.8 trillion market cap of the entire S&P 500,” the report said.
The report also laments the fact that it is possible that the S&P 500 could have six companies worth at least $1 trillion at the same time if Meta Platforms, the social media giant formerly known as Facebook, continues to rebound. Meta now has a market valuation of about $930 billion.
With the continuous strengthening of the tech ecosystem it is altogether possible that all six of these companies could soon each be worth at least $2 trillion, if not more. After all, Microsoft and Apple are knocking on the door of $3 trillion.
Among the other tech leaders chip leader Nvidia and China's Tencent are moving closer to the trillion-dollar market valuation mark, the report added.
It seems almost unfathomable that so many companies could be worth this much. But earnings growth for many of the top techs continues to be strong, and that is pushing prices higher, the report added.
Still, the insatiable investor appetite for trillion-dollar techs reminds some market analysts of the Nasdaq froth of the 1990s and early 2000. It could be a warning sign, it said.
“Tesla's rally is reminiscent of Cisco's move in 2000, a move that marked the bubble top in 2000,” Mike O'Rourke, chief market strategist with JonesTrading, said in a report this month.
O'Rourke pointed out that Cisco shares soared about 50% in the first three months of 2000 and analysts at Credit Suisse predicted that Cisco would be the world's first trillion-dollar company.
It didn't happen. Cisco, which was worth about $550 billion at the height of tech stock mania two decades ago, is now valued at about $240 billion. Intel, another tech stock leader of the late '90s, has struggled in the past few years and is nowhere close to its 2000 peak valuation.
It's proof that becoming a market leader may be easier than staying a market leader. There is no guarantee that the likes of Microsoft, Apple, Amazon, Alphabet, and even Tesla will stay at the top.