The valuations on the world’s largest companies — mostly tech names — look goofy if you zoom out and compare them to other assets.
That’s exactly what the team at the Kobeissi Letter did, offering up these stunning notes:
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The top 10 US stocks now have a combined market cap of $25.3 trillion.
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If the top 10 US stocks were a stock market, they would be the second-largest in the world, even exceeding China.
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The top 10 US stocks’ market value is also larger than China’s GDP of $19.4 trillion, the world’s second biggest economy.
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These 10 companies are now collectively worth about 80% of US GDP.
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The top five US companies alone have a combined market cap of $18.6 trillion, exceeding the value of every global stock market outside the US.
The top 10 most valuable companies in the US are led by the multitrillion-dollar triumvirate of Nvidia (NVDA), Alphabet (GOOGL), and Apple (AAPL), followed closely by Microsoft (MSFT), the newly public SpaceX (SPCX), and Amazon (AMZN). Rounding out the list are Broadcom (AVGO), Tesla (TSLA), Meta (META), and Micron Technology (MU).
The massive valuations of megacap tech giants keep rising because they are essentially sucking all the oxygen out of the room, and Wall Street is completely fine with it.
We are smack in the middle of a massive asset-concentration boom where “Magnificent Seven” players like Nvidia and newly public behemoths like SpaceX (and soon, OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT)) aren’t just selling software, they are building the digital infrastructure of the next century.
In turn, they are generating loads of free cash flow, which allows them to aggressively buy back their own shares and self-fund trillions in capital expenditures for artificial intelligence, while smaller players scramble for scraps.
The excitement is keeping the bullish trade on the names intact.
“Overall, SpaceX going public is an important watershed moment for the broader tech sector in our view as this AI revolution and data takes this next step forward,” Wedbush tech analyst Dan Ives wrote in a note. “[It’s] also important to note that as tech stalwarts like SpaceX, OpenAI, and Anthropic get more capital and go public this will just further drive more investments and capex into the AI revolution flywheel as the 2nd/3rd/4th derivative names across tech, energy, and infrastructure benefit over the next few years.”
Ives added, “This speaks to our view that the AI Revolution is still in the 3rd inning and investors are still underestimating the scale/scope of this spending cycle.”
