Market capitalization, also referred to simply as market cap, is the total value of a publicly traded company's share price multiplied by the number of outstanding shares. Once calculated, market cap can be used as an indicator of a company's net worth. Of the ten largest companies in the world by market capitalization, eight are American-based companies, while the remaining two are Chinese-based companies. Additionally, all ten of the largest companies had a market capitalization of more than US$ 300 billion by the end of the first quarter of 2019. The list of the highest ranking market cap companies is dominated by technology and consumer service companies. Some of these companies are highlighted below.
The 4 Largest Companies by Market Capitalization
Microsoft had a market capitalization of US$ 904.86 billion for the first quarter of 2019, ranking as the largest company in the world. Microsoft is a multinational technology company based in Redmond, Washington, USA, but has operations worldwide. The company was founded in April 1975 by Bill Gates and Paul Allen, and by the 1980s, it dominated the PC operating system market. Additionally, Microsoft was the largest company at the turn of a new millennium and continues to rank among the world's top companies in terms of various measures. The company offers a wide range of products and services including computer software, personal computers, consumer electronics, and related services.
Apple Inc. was the first company to cross a market capitalization of US$ 1 trillion in 2018. However, its market cap has since dropped, recording a value of US$ 895.67 billion in the first quarter (Q1) of 2019. The drop has been attributed to the struggling sale of iPhones. The California-based company designs, develops, distributes, and sells computer software, consumer electronics, and online services. Apple's services and devices, such as the App Store, are still major revenue streams, fetching billions of dollars each month.
Amazon, along with Apple Inc., Facebook, and Google, form what is often referred to as the "Big Four" tech companies. With a market cap of $874.71 billion in Q1 of 2019, Amazon is the third largest company in the world. The technology company is headquartered in Seattle, Washington, USA, and specializes in e-commerce, digital streaming, artificial intelligence, and cloud computing. Through its technological innovations, Amazon has disrupted well-established industries. The company is currently the second largest employer in the US.
Alphabet Inc. is the parent company of Google and was formed through the corporate restructuring of Google in 2015. It is currently the fifth largest technology company in the world and the fourth largest company in terms of market cap, with a value of $818.16 billion in Q1 of 2019. Alphabet Inc. was created to separate Google’s core businesses, such as advertising and Google Search, from other new projects such as Verily Life Science and Calico. Google has grown significantly grown since the company became publicly traded in 2004.
Why Do American Companies Dominate the List of the World's Largest Companies by Market Cap?
Historically, Japanese-based companies dominated the list of the biggest companies in the world in terms of market cap, as Japan's currency, the yen, had a higher value. However, American-based companies now dominate the list of the biggest global firms, which is explained by several factors including the strength of the US dollar.