There is the wealthiest 1% of people on the planet who control 40% of the world’s wealth, there is also the select club of the six largest global market caps which are each worth over US $ 1 trillion. on the stock market, five of which are – we can imagine – technology companies. Wealth does not only concentrate more and more, it gives the impression of having more and more tendency to sectorize itself.
Is it really the effect of a trend or rather the continuation of the swelling of a speculative bubble like the one we already experienced at the end of the 1990s and which was miserably unbalanced from March 2000 to March 2003? ?
Hard to predict, but the latest surge of Big Tech seems irrepressible, as the title of the Apple company has again demonstrated to us this week, which for a few seconds on Monday crossed the mark of 3 trillion in stock market valuation, unheard of.
It must be said that Apple is not close to a first. Three years ago, in August 2018, the California-based company became the first company in the world to post a market value of over $ 1 trillion.
Two years later, in August 2020, Apple did it again, this time accumulating a valuation of more than 2 trillion on the stock market and, last Monday, it was the mark of 3 trillion that it stealthily crossed during the session before fall back in the wake of a broader pullback in technology stocks.
Still, it’s still incredible that a company the size and scope of Apple’s could triple in value in just three years. Already, being able to accumulate a stock market value of more than 1000 billion is an achievement in itself, and yet, Apple is not alone on its side.
As of December 30, only six companies in the world ended the year 2021 with a market valuation of more than 1000 billion. Apart from Aramco, the Saudi Arabian oil company which ranked 4the rank of the largest capitalizations on the planet with a value of 1906 billion, the five other companies that have achieved the feat are all among the Big Tech and they are all American.
Besides Apple, 1D global company with its $ 2,923 billion in value, Microsoft came in at the 2e rank with 2547 billion, followed by Alphabet (Google) at 1939 billion, then Amazon at 5e rank with its 1,710 billion and finally Tesla, which brought up the rear at 6e rank with a valuation of 1074 billion.
It should be noted that Meta, the parent company of Facebook, another staple of the select group of Big Tech, arrives at 7e ranks among the world’s largest market capitalizations with a value of 958 billion as of December 30, 2021, but the company which had managed to cross the threshold of 1000 billion in June 2021 suffered a decline in the value of its stock from the month of August.
In the kingdom of Big Tech
While this ranking reflects the hegemony of large high-tech companies over global economic activity, it also still seems to overstate their impact in the actual reality of things, as was the case during the tech bubble at the start of the 1980s. 2000s.
We only had new economy titles at the time. Remember Nortel, which at its peak had a valuation of CAN 400 billion and suddenly pulverized before disappearing.
A recent publication by the World Economic Forum (Davos Forum) reminds us that after the crash of technology stocks, in 2004, when the NASDAQ started to take a little color again, only one techno company, Microsoft, was included in the ranking. of the world’s largest capitalizations.
In 2004, the largest companies on the stock market had an average valuation of 250 billion. There were about ten of them, conglomerates like GE, oil companies like Exxon, the main industrial sectors were represented. Remember also that in 2004, Apple posted a much more modest stock market valuation of some 10 billion, that was three years before the launch of the iPhone …
Today, with the strong polarization generated by the valuation of Big Tech, investors are only interested in technology stocks, as also shown by the successes obtained by the recent initial public offerings of emerging tech companies.
However, as the World Economic Forum underlines, this financial sacralization of tech companies is not reflected in the real economy, while the labor productivity rate of the G7 countries, which grew by more than 2% per year in 2004 , today only shows an average increase of less than 1% per year.
We can therefore see that the technological advances brought about by the large companies in the sector are essentially used for their own enrichment and that of their shareholders, which can fuel speculative bubbles rather than fuel economic growth and development in general.