Giants do exist!

Giant cap companies in various sectors are found across the globe. For example, in the automotive industry we find Ford (USA), Toyota (Japan), Volkswagen (Germany), Tata (India), Volvo (Sweden). In the financial sector, we have a similar scenario with the likes of HSBC (United Kingdom), JPMorgan Chase (US), Banco Santander (Spain), Agricultural Bank of China-A (China), Deutsche Bank (Germany) and others.

Whilst the pharmaceuticals, energy and retail industries also have a geographic spread, the same cannot be said for the rapidly-growing tech industry.

It is interesting to point out that none the twenty largest tech giants found globally are located outside of the United States and China. In 2013, out of the twenty, thirteen firms were located in the US and three in China whilst the remaining where in Japan, Russia and South Korea. Thus, in just 5 years, we have seen a radical shift since the top twenty technology firms are now either Chinese (8) or American (12).

As we can see on the above table, the list of these companies is now worth $5.9 trillion with a 75%-25% split in terms of the US and China. Some other things to highlight from the list are that there seems to be a huge disparity between the top seven companies and the rest. In actual fact we have over 81% of the total market cap in all the twenty companies in just the first seven companies! This figure includes giant firms like Apple, Alphabet, Amazon and Microsoft from the US and Alibaba and Tencent from China.

Meanwhile, the bottom 14 companies make up just 19% of the value – a fact that underlines how hard it is for a tech company to challenge the top tier of the market.

 

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Source: Kleiner Perkins Caufield & Byers internet trends report 2018, Forbes

Past performance is not a guide to future results. This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax or legal advice. Similarly, any views or opinions expressed are not intended and should not be construed as investment, tax and/or legal recommendations or advice.  No person should act upon any opinion and/or information in this document without first obtaining professional advice.

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