Big Tech Once More Flexes Its Muscles

Tech titans crowned the list of top 20 U.S. companies

Managing Editor
Apr 30, 2024 at 11:37 AM
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Subscribers to Chart of the Week received this commentary on Sunday, April 28.

It’s the tech sector’s world, we’re all just living in it. The Nasdaq-100 (NDX) just wrapped up its best weekly gain since Nov. 3, an astounding feat considering the elevated bond yield environment and inflationary pressures that are persisting well past the Federal Reserve’s comfort level. Even as rate cut forecasts get pushed out, Big Tech keeps on keeping on.

The new normal on Wall Street – and it’s been like this for some time now -- is there could be hostile aliens from another planet on our doorstep, and it wouldn’t hurt the stock market if one of the Magnificent Seven had just reported a beat-and-raise. Half of the U.S.’ largest companies by market cap reported earnings this week, and the results shook up the market cap board, while once more offering a reminder of their immense gravitational pull on the investor solar system.

Below is the most recent list of top 20 U.S. companies, sorted by market cap, per Schaeffer’s Senior Market Strategist Chris Prybal. Microsoft (MSFT) has wrestled the $3 trillion crown from Apple, perhaps only temporarily, thanks to a fiscal third-quarter earnings and revenue beat on Friday morning, fueled by revenue from cloud service Azure. The shares added 3.2% post-earnings on Friday but have some work to do to reclaim the March 21 record high of $413.

Market Cap Top 20 April COTW

The other big winner this week is Alphabet (GOOGL), which added 10% on Friday after the company’s first-quarter top-line beat, with a $70 billion share repurchase and first ever dividend the cherries on top. The post-earnings pop helped GOOGL cross the $2 trillion market cap level, joining Apple (AAPL), Nvidia (NVDA), and MSFT.

Meta Platforms (META) had a week to forget, shedding 10.6% on Thursday in the wake of a dismal second-quarter revenue guidance. While Meta may seem to be on the outside looking in, META’s market cap had not yet even reached ‘club trillion’ roughly four months ago on Dec. 8, per the table below.

Mag 7 Market Cap 2023

When you view the forest from the trees, Meta stock is in fine shape. This week’s bear gap should also be weighed with the post-earnings pop of 20.3% from February, as well as the 24.1% year-to-date gain. The same can be said for Nvidia (NVDA), which recently suffered the dreaded 10% correction off an early March record peak. Once more, looking back four months, NVDA has grown its market cap by nearly one billion. In fact, only Alphabet has escaped April without a scratch. When you stretch the data out, these pullbacks are at worst a blip on the radar, and at best a necessary correction that yields a more advantageous entry point.

Mag 7 COTW

The market cap board could look a lot different in a week and month down the road. Amazon.com (AMZN) and Apple (AAPL) report earnings next week, on April 30 and May 2 after the close, respectively, while we won’t get a glimpse at Nvidia’s until May 22. It’s easy to be swept up in the day-to-day headlines and think: ‘wow, META is in trouble, they lost a lot of market cap today.’ Or ‘Nvidia’s 15 minutes of fame is over!’ Tables like the ones above are a reminder of the seismic scope and scale in which these companies operate; it’s a whole different playing field. And as long as these titans rule over us, investors must couch their macro data concerns with Big Tech performance.

 

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