The latest data reveals that these S&P 500 companies — Apple, Microsoft, Alphabet A, Amazon, and Tesla — are currently trillion-dollar companies with a market cap exceeding $1 trillion. It is worth noting that very few companies have crossed the threshold of $1 trillion market capitalization.
Biggest S&P 500 Companies by Market Cap
Market capitalization or market cap is the value of the publicly-traded company’s outstanding shares.
US companies predominately rule this prestigious trillion-dollar companies club. Apple in 2018 became the first company to join this elite trillion-dollar companies club. In 2020 — just after two years — Apple became the world’s first $2 trillion company. Microsoft is the second most valuable company after Apple as its market cap crossed $2 trillion ($2.27 trillion) as of January 2022.
Similarly, Alphabet with a $1.807 trillion market cap and Amazon with $1.611 trillion are also the elite member of trillion-dollar companies club. Similarly, at the end of this year, Tesla also joined the elite club of trillion-dollar companies. This electric vehicle manufacturing company finally hit the 13-digits market capitalization due to strong trading that lifted the share price, catapulting shares of Tesla up nearly 30% in October. Besides, Facebook is also on the verge of hitting the $1 trillion mark again.
Trillion-Dollar Companies & Their Stories
For a brief moment on Jan 3, 2022, this iPhone manufacturer reached a new milestone by becoming the first $3 trillion company due to a surge in its stock price. This milestone of a brief crossover to $3 trillion is due to intra-day trading where its share hit the record high of $182.88. This beloved iPhone-making company is also the first company to hit the $1 trillion and subsequently $2 trillion mark.
In 1976, Steve Jobs and Steve Wozniak, both college dropouts founded Apple Computers that changed the transformed the ways people looked into computers. Jobs wanted computers to be small enough to be kept at homes and offices so that they would be more practical to use.
Both boys started working on their first product, Apple I at Job’s garage. It is not until the second product that achieved mass success and put them on the map. Their second product Apple II was the first personal computer with the world’s first color graphics, complete keyboard, and sleek plastic casing which Jobs envisioned. Apple II was an instant success. The company had a record-setting public offering in 1981. In 1983, the company eventually made the fastest entry to date on the Fortune-500 list of America’s top companies. Macintosh’s introduction in 1984 was a failure initially, but in coming years this product became the model for all subsequent computer interfaces.
In the late 80s, Apple started struggling when the board threw Jobs from the very company he created. Steve Jobs removal from the company according to him was the best thing that happened to him. He instead of mourning started creating innovative small companies that allowed his creative juices to flow. The experiences that he gained during that period became the cornerstone for the revival of the company on his return.
Jobs rejoining the company became a monumental event for the success of this company. Upon his arrival, he brought various changes in the operational and marketing strategies of the companies. Under his leadership, Apple introduced many ingenious products like iMac in 1998, iPod in 2001, and touch-screen iPhone in 2007.
The year 2021 was monumental for Apple. The company reached $3 trillion market capitalization this year for a brief period. Apple shares were up by 35% in 2021. The pandemic has surged Apple’s business as remote working becoming a new norm has accelerated the demand for tech products.
Apple shared financial results for its fiscal 2021 fourth quarter ended on September 25, 2021, as shared in Barron’s:
Apple’s revenue was $83.4 billion, up 29% from the year-ago quarter. That included $38.9 billion in iPhone sales, up 47% from a year earlier, and services revenue of $18.3 billion, up 26%. In the quarter, Apple posted $9.2 billion in Mac sales, $8.3 billion in iPad sales, and $8.8 billion in wearables, including Apple Watch and AirPods.
As the data above reveal, this year iPhone is the biggest revenue earner for the company. This year also saw the growth of Apple services including, Apple Music, Apple TV, iCloud, and App Store.
Microsoft is the second ever company to cross the $2 trillion market capitalization mark after Apple. In 2021, this software maker hit the $2 trillion mark soon after Windows 11 launch — a launch after 6 years of Windows 10.
The pandemic has contributed towards the boost of revenues of this software company like others S&P 500 trillion-dollar companies, as the pandemic urged people to work and study from home on their computers, thus boosting the demand for Windows — it captures 69.61 percent share of the desktop, tablet, and console OS market in December 2021. Besides, the pandemic has also driven cloud business and gaming platforms, which boosted the cloud services segment revenues of the company.
The business of this software company thrived during the pandemic as its value doubled and its stock surged to 64%. The company’s stock price appreciated to $266.69 per share.
This software giant multi-national corporation was started in 1976 by Harvard dropout Bill Gates and his friend Paul Allen. Both childhood friends developed BASIC, a computer programming language used on an early personal computer (PC), the Altair. During the next few years, they further refined BASIC and created other programming languages for computers. By the end of 1978, sales reached more than $1 million. Later in 1981, the company developed MS-DOS — an operating system for another company, IBM personal computers.
MS-DOS was the turning point for the company as it was a huge success back then. Many other computer companies licensed MS-DOS as their operating system from Microsoft, which enhanced revenues even more. The company grew by the late ’80s went public, thus making Bill Gates the world’s youngest billionaire.
With the launch of the graphical user interface, Windows, Microsoft positioned itself as the most ground-backing technology company. By 1993, Windows 3.0 became a huge success, and millions of copies of this software were sold per month. Microsoft was the first software company to reach $1 billion in revenues. Many versions of Windows have been launched until now including Windows XP and Vista.
Microsoft also entered the mobile phone and gaming industry. In 2001, the company released Xbox, placing Microsoft in the second spot in the gaming industry. Minecraft is also a successful gaming product of the company. Many mobile phone companies like HTC, Nokia adopted Windows mobile phone Operating system.
Microsoft also acquired Skype in 2011 with $8.5 billion to compete with FaceTime of Apple. Besides, the company has acquired other businesses — social network LinkedIn, video game developers Mojang and Zenimax, and the code-storage service GitHub. The company has an Intelligent Cloud segment; Microsoft’s SQL Server, Windows Azure Platform, Windows Server, GitHub, Enterprise Services, and more.
As aforementioned, the pandemic has surged the demand for Microsoft products. During the year, the PC market grew by over 10%, so the newly launched Windows 11 further heightened the revenues. The earnings of all three revenue streams of the company — cloud computing, productivity and business processes, and more personal computing were more than anticipations. By 2021, Microsoft Azure became the top cloud service provider ahead of Google and Amazon, with a market share of 20%.
According to data by Microsoft for the quarter ended on September 30, 2021, the revenues of the company for the quarter increased to $45.3 billion. It was 22% more than the revenues for the same quarter last year. Microsoft reported $20.5 billion in net income for the same quarter.
Intelligent Cloud unit generated a major chunk of revenues – $17.0 billion. Azure and other cloud services grew 50% year over year in the quarter. Secondly, Productivity and Business Processes unit — Office, LinkedIn, and Dynamics — generated $15.0 billion of revenues. And lastly, Personal Computing segments — Windows, devices, gaming, and search & news advertising — earned $13.3 billion in revenue for the company this quarter.
Alphabet joined the elite club of trillion-dollar companies with a valuation of $1 trillion in 2020. The company also hit a $2 trillion valuation for a brief moment in August 2021. The company’s share price also rose to $2,987.03 per share during that period. Since the pandemic, the company’s business has flourished due to the growth in its cloud business and digital ads. Now the company sits at a market cap of $1.807 trillion, making it the third biggest S&P 500 company at the moment based on valuation.
There is absolutely no doubt that Google transformed the ways we access information. The company’s tools and apps we use daily have made our lives easier than past generations. Everything from its search engine to Google Drive shows how much this company has been able to achieve.
In 2015, Google restructured and renamed Alphabet, while making Google the subsidiary. By becoming Alphabet, Google has now broadened its horizons and stepped into more domains besides search engine and advertising.
Google was created by Sergey Brin and Larry Page in 1998, which later became a subsidiary of Alphabet. In 2015, Google’s leadership decided to become Alphabet, a technology conglomerate, because of its extending interests in other areas besides internet searches and advertising. Alphabet has a vast domain of products to its portfolio. Various products related to robotics, life sciences, smart homes, biotechnology, healthcare, and anti-aging are now under its domain.
The alphabet now consists of various companies besides Google. Alphabet’s biggest brand is certainly Google — it also includes another bunch of companies: Calico – a biotech company, Nest– Smart home, Google Venture – a venture capital firm, Google X– R& D company, Google Capital– Private Equity firm, and Fiber.
For investors, nothing majorly changed as they swapped each of Google’s shares for each Alphabets now. In December 2019, both founders of Google both resigned from their executive positions but decided to remain board members and shareholders of the company. The same year Sundar Pichai became the CEO of Google.
The restructuring has helped the company in terms of improving its financials. This year this giant tech company’s valuation also crossed over the threshold of $2 trillion, making it the third S&P 500 company after Apple and Microsoft to reach this level. The company also recorded a record-breaking increase in revenues of 41% to $65.1 billion during the third-quarter ending on September 30, 2021. Besides, its net income also increased to $18.93 billion as compared to $11.25 billion same quarter last year, making its profit to jump by 69%.
The pandemic has helped the businesses of these Big Techs to boom further as people stayed at home and worked in a cloud-based environment. Alphabet benefited from the pandemic as the rise in revenues and incomes also testify to it.
Amazon also is part of the elite club of trillion-dollar companies. The company now has a market capitalization of $1.611 trillion and flourished like other big tech companies in S&P 500 during the pandemic. Many people during the pandemic preferred buying things online rather than going out, which accelerated the businesses of e-commerce businesses like Amazon.
The company was created by the World’s Richest Billionaire by Forbes 2021, Jeff Bezos in 1994. Bezos left his steady job and started to work on his company, which was eventually called ‘Amazon.com Inc. Amazon has come a long way from Bezo’s garage to a trillion-dollar company as it is.
Amazon started as an online bookstore. The early days of the company were a struggle for Bezos. He and his employees hand-packed each book and then dispatched them to the post office themselves. It even was a struggle to get investment back then. Amazon was a novel business model, and not many people trusted this business.
The success of Amazon exhibit how far the company has come — progressing from a simple bookstore to the world’s leading e-commerce marketplace. For Bezos, it was always the part of the plan to finally become “The Everything Store“ instead of just books.
The journey of Amazon from a bookstore to selling everything was not necessarily an easy route. The company got public in 1997 with a $300 million valuation. By 1997, Amazon allowed third-party sellers to sell their merchandise through their site, which eventually became a major success. Amazon Prime and Amazon Echo & Alexa Devices are also contributing towards the success of this trillion-dollar valued company.
Amazon’s financials did not show very promising figures as anticipated. The sales growth has been slower than expected, and profitability also shrank. Amazon revenues have shown a rise in the third-quarter ending on September 30, 2021, with net sales up by 21% to $110.8 billion compared with $96.1 billion last year — less than expected.
Various factors account for this decelerating revenues and income. Since lock-down is lifted over the world now, the business of Amazon got affected upon opening of physical shops. Besides, the increasing operational cost due to supply-chain issues, rising labor costs, more spending on new warehouses and other logistics infrastructure, and increased freight and shipping costs also account for lower incomes during the third quarter.
Surprisingly, the quietest cloud-based segment of the company AWS is the fastest-growing segment of Amazon this year. Amazon Web Service (AWS) — cloud-based computing platform — grew 39 percent to $16.1 revenues, as more companies adopted new cloud-based technologies to run their business during the pandemic.
Currently, Tesla with a market cap of $1.03 trillion stands tall among the trillion-dollar companies. This sustainable energy and electric vehicle company is now the sixth American company to join the prestigious trillion-dollar companies club. The accomplishments of this company make its CEO the richest person in the world, even above Jeff Bezos. It only took 12 years for this innovative company to reach the trillion-dollar group — the fastest that any company has crossed this mark since Facebook.
In 2003, this American producer of electric cars, solar panels and batteries for cars, and home power storage was created. Two American entrepreneurs, Martin Eberhard (CEO) and Marc Tarpenning (CFO) started this company and named it after Nikola Tesla.
The main objective of the Tesla company back then was to develop electric sports cars. Through various means, they obtained the funding for their company. Elon Musk, the co-founder of PayPal, contributed more than $30 million for this new ambitious company. He then started serving as the chairman of the company.
The company launched its first car back in 2008 — Roadster. The car achieved 394 km with a single charge. The Roadster was nothing like the previously produced electric cars, as it was a more efficient, cost-effective, and powerful car that could accelerate to highway speed. The Roadster could be charged anywhere from a standard wall outlet as it used lithium-ion cells, which laptop batteries also imbued.
Musk took over the company as both co-founders left the company shortly after the launch in 2007. The company due to financial constraints and challenges went public in 2010. It opened on the NASDAQ at $17 a share and raised $226 million in IPO. The company also successfully lowered its cost of production and then the price of its products eventually.
The year 2011 proved to be massive for the company due to the launch of its first mainstream consumer market product — Model S. Model S was a huge success upon its release.
Tesla has expanded to various domains besides automobiles. The company even changed its name from Tesla Motors to Tesla, Inc. It has designed many solar energy generation products for homes and businesses. These include solar panels, solar roof tiles, batteries for cars, and home storage.
This year Tesla joined the trillion-dollar gang for the first time when its shares jumped by 12% to $1,025. Tesla owed big time to two big factors. Firstly to car rental Hertz Global Holdings Inc, whose order of 100,000 vehicles enabled the company to reach this elite club of trillion-dollar companies. Secondly, Morgan Stanley analyst Adam Jonas raised his price target on Tesla to $1,200 a share, which also contributed to rising in stock price. Besides, Model 3 was the top-selling vehicle in Europe in September 2021.
This electric vehicles manufacturer is different than others in the trillion-dollar companies club. Firstly, because the company has Junk-Ratings of BB+, its CEO has some serious fraud accusations, and its sales and earnings are lower than others in the group.
Despite the company envisioning itself to be a ‘clean energy’ company, Tesla’s major chunk of revenues comes from the sale of its electric automobiles. The automotive revenue increased to $12 billion in the third quarter, which is a 50% jump from last year’s third quarter.
The Final Words
During the pandemic, the tech industry majorly thrived, thus accounting for the big tech companies in the trillion-dollar companies group. Amazon flourished during this period as more people switched to online shopping. Apple and Microsoft saw their earnings rising as work from home enhanced the need for cloud-based and IT geared services. During the pandemic, more people stuck their noses either to their computer screens or smartphones thus thriving Google’s business. Elon Musk’s social media presence and influence have also helped Tesla to finally reach the trillion-dollar companies club.