The ongoing period of volatility and unpredictability in the global economic panorama has left severe dents in certain sectors. But one sector that has largely remained impervious to the uncertainty has been the technology sector.
This is especially true of the US technology sector. According to findings of Bank of America Global Research, the market cap valuation of technology stocks in the US have surpassed the valuation of the entirety of the market cap of the European stocks.
US technology stocks' massive numbers' accumulation
In terms of sheer numbers, the comparison stands out much starkly. While the US technology stocks are valued at about $9.1 trillion, the European stocks’ market capital is valued at around $8.9 trillion.
The European market capital valuation includes both Switzerland and the United Kingdom’s stocks. This is quite a gain and quite an increase since almost 13 years ago, in 2007, a similar research had found out that the market capital of European stocks was quadruple in valuation numbers as compared to technological stocks of American companies.
This boost in valuation numbers is mainly brought about by these five American companies – Facebook, Apple, Microsoft, Alphabet, and Amazon. Data points that have emerged in these six months of global wobbling also present a drastically changed picture about how these five companies have taken a much deeper control over the markets, within the United States.
January 2020’s market value figures showed that these five companies had around 17.5% share in the S&P 500. Latest figures indicate that this share has gone up by over 2.5% to account for an increase to more than 20%.
And within this last number, it is Apple that holds considerable heft since it became the first company to have a market valuation of $2 trillion earlier this year. Market analysts are worried about this dominant capturing of the market.
Moreover, these increases in market capital are also indicative of the way the stock markets have functioned in the two economies. In the decade between 2010-2020, the American stock market, specifically the S&P 500 has had an increase of about 200%.
In comparison, for the corresponding time period, the Euro Stoxx 50 has had only a 13.4 per cent. The United Kingdom's FTSE 100 has had merely a 11 per cent rise for the same decade. However, companies in the US technological sector have nothing to worry about considering the ongoing worldwide trends have not only helped turn the situation around in their favour but have also helped them reap a windfall when the predictions were that of a sandstorm.