Change in the ranking of largest companies by market capitalization

 

Market capitalization is one metrics commonly used to identify and rank the most valuable companies in the world. Changes in ranking of the largest companies by market capitalization can illustrate how the world is changing in which direction.

 

The following infographics show which companies were valued the most in the last decades.

 

2000 World Largest Companies by market capitalization

Source: Capital IQ

 

2000: The Dotcom Bubble and dominance of telecom companies

By the time of Dotcom Bubble, Microsoft had become the most valuable company in the world. This was expected as Microsoft had sold its software, “Window” to virtually every single computer in the world.

 

Another interest thing to note is that there are many telecom companies, such as NTT Docomo (Japan), Vodafone Group (Britain), Nippon Telegraph and Telephone Corporation (Japan), Nokia Corporation (Finland) and Deutsche Telekom AG (Germany). This shows that mobile phones have become a huge industry by the new millennia. However, Nokia, once the dominant mobile phone maker in the world, has struggled since the 2000s and disappeared from the list in the following years.

 

2005 World Largest Companies by market capitalization

Source: Capital IQ

 

2005: Downfall of the tech and no single sector dominance

By 2005, the bubble in tech sector has burst, and companies from many different sectors make up the rank list. With the burst of the bubble, Microsoft had come down from the top, and GE has claimed the crown. We start to see a number of financial companies, Citigroup, Bank of America and HSBC Holdings, appearing in the list.

 

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2010 World Largest Companies by market capitalization

Source: Capital IQ

 

2010: Downfall of US finance with the Global Financial Crisis, and rise of China

With the onset of the Global Financial Crisis in 2008, many financial companies and banks that appeared on the list in 2005 have disappeared. Another significant change observed is that with the robust growth of the Chinese economy, a number of Chinese companies have made entry. PetroChina Company, Industrial and Commercial Bank of China, and China Construction Bank Corporation all represent that Chinese energy and finance companies have grown in size and influence on the global stage.

 

2015 World Largest Companies by market capitalization

Source: Capital IQ

 

2015: Rise of technology sector

We start to see the rise of technology companies around this time. Apple, Microsoft and Alphabet have taken the lead while a number of energy and finance companies still remain on the list. However, with the collapse of oil and commodity price around this time, these energy companies would exit from the list in the following years.

 

2005 World Largest Companies by market capitalization

Source: Capital IQ

 

2020: FAMANG and complete dominance of technology

COVID-19 pandemic has created a perfect opportunity for technology companies. The so-called FAMANG (Facebook, Apple, Microsoft, Amazon, Netflix and Google) comprise roughly 50% of NASDAQ index.

 

Another interesting point is that we see Alibaba and Tencent Holdings, the biggest Chinese e-commerce and technology companies from China, are on the list, competing with US tech companies. With the exception of Saudi Arabian Oil Company (ARAMCO), which listed in 2019 December and subsequently became the world’s most expensive company, seven out of 10 most valuable and expensive companies in the world are from technology sector.,

 

Will we continue to see the dominance of technology sector in the next five years or a decade? Many companies have succeeded and declined, but as Microsoft—once a software tech company that now revamped itself into a cloud service company—shows its resilience in remaining the top 10 list throughout this 20-year period, tech dominance may not end soon as our lives become more dependent on technology and its development.

 

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