With a $9.1 trillion market cap, US tech stocks are now worth more than the value of the European stock market. Bank of America reported this development in a note to clients last week. In comparison, the total worth of the European stock market amounted to $8.9 trillion. This includes powerhouses such as Switzerland and the United Kingdom. Of course, the
value of US tech stocks consists of equity and not debts. Also, some entries include the value from businesses outside the US. Tech stocks led the stock market rally to new heights despite the Covid-19 pandemic. This includes the S&P 500 reaching a record high even as the economy remains mired in a slump.
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Tech Stocks Bares FAANGs and More
The blistering tech stock rally features big names from the FAANG group. This consists of Facebook, Apple, Amazon, Netflix, and Alphabet (Google, hence the G). Microsoft and Tesla also played big parts in the tech stock domination. Unfortunately, nobody has yet come up with a nickname that includes these two.
Apple alone is worth $2 trillion, which is already worth more than 20% of the Euro market. With “only” $1.7 trillion market cap, Amazon’s Nasdaq share value has almost doubled. Amazon stock is now about 20 times higher than it was ten years ago. Microsoft also enjoys a $1.73 trillion cap, while Google holds a $1.12 trillion value. Facebook doesn’t have trillions, but it does have $837 billion in market capitalization. Adding the caps of Facebook, Microsoft, Google, and Amazon to Apple pushes the total to $7.5 trillion. The rest of the tech sector only needs to cough up $1.6 trillion. These include heavyweights like Alibaba, Tesla, NVidia, Netflix, Salesforce, Paypal, Intel, and AMD. Each of these players has at least $100 billion in value, with Alibaba the next highest at $796 billion.
For much of 2020, technology stocks have gone up compared to non-tech companies. The big five (Apple, Amazon, Microsoft, Facebook, and Google) take up almost 24% of the S&P 500. While the S&P 500’s value has risen by 7% this year, each of these five has risen by double digits. Facebook and Microsoft have gone up 40%. Apple has shot up 66%, while Amazon zoomed 79%. Alphabet (Google) reported a modest rise still more than double that of the S&P 500’s rate at 19%.
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It’s not that the Euro stock market isn’t performing, it’s more of the rate of growth. In 2007, the European market was four times as large as US tech stocks. Since 2010, Euro Stoxx 50 has risen 13.4% while the UK’s FTSE gained 11%. While positive, they pale in comparison to the S&P 500, which recorded an almost 200% gain.
Despite the slumping US economy, plus fears of overvaluing for US stocks, the rally doesn’t seem over. The S&P recently reached its highest rate yet last August 18, registering 3,389. And there are no signs of slowing down. The market cheers on any news on advances in the fight against COVID 19, or any economic recovery efforts. If this ends in a fiery crash sooner or later, don’t blame the virus on it.
Watch this as Inside News reports that American tech stocks are now worth more than the entire European Stock Market:
What do you think the market is saying right now? Is the tech stock bull run just getting warmed up, or is it too late to join the party at this point? Let us know what you think by sharing your comments below!