Technology

5 of the Most Valuable Companies in the World Are All US Technology Stocks

Lee Jackson

Published: August 29, 2016 9:45 am

Last Updated: January 13, 2020 4:09 am

An interesting thing has happened, something that sort of snuck up on many investors while technology as a sector has suffered somewhat this year. The big have gotten bigger, and continue to do so, and the reason is fairly simple to understand. They all tend to dominate the subsectors of technology they are in, and they all have grown so big and powerful that it may be almost impossible to surpass them.

Despite the technology sector troubles this year, it is intriguing to note that five of the most valuable companies in the world are U.S. tech companies. In fact, at the end of July, these top companies were the five most valuable in the world, though one recently has been barely surpassed by Exxon Mobil and Berkshire Hathaway. Investors looking to add quality tech stocks to a portfolio should consider these behemoths.

Apple

This technology giant has had a rough year and is still down over 10% in a market making new highs. Apple Inc. (NASDAQ: AAPL) evolutionized personal technology with the introduction of the Macintosh in 1984, and it is among the leaders in the world in innovation with the iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, OS X, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud.

The tech giant boasts a market capitalization of a stunning $576.24 billion. Apple investors receive a 2.13% dividend. The Wall Street consensus price target for the stock is $124.11. The shares closed Friday at $106.94.

Alphabet

The search giant continues to expand and is even working on a driverless car now. Alphabet Inc. (NASDAQ: GOOGL) provides online advertising services in the United States, the United Kingdom and rest of the world. It offers performance and brand advertising services, and it operates through Google and Other Bets segments. The Google segment includes principal internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.

The Google segment also sells hardware products, comprising Chromecast, Chromebooks and Nexus. The Other Bets segment includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X and other initiatives.

The company has an impressive market cap of $545.16 billion. Its consensus price target is $939.74. The shares closed last Friday at $793.22.
Microsoft

This top old-school technology stock gives investors a degree of mega-cap tech safety. Microsoft Corp. (NASDAQ: MSFT) develops, licenses and supports software products, services and devices worldwide. Its Productivity and Business Processes segment offers Office 365 commercial products and services for businesses, including Office, Exchange, SharePoint and Skype, as well as related Client Access Licenses (CALs); Office 365 consumer services, such as Skype, Outlook.com, and OneDrive; and Dynamics business solutions, including financial management, customer relationship management, supply chain management and analytics applications for small and midsize businesses, large organizations and divisions of various enterprises.

The More Personal Computing segment comprises Windows OEM, volume and other non-volume licensing of the Windows operating system, as well as patent licensing, Windows Embedded, MSN display advertising and Windows Phone licensing system; devices, including Microsoft Surface, phones and PC accessories; and search advertising, including Bing and Bing Ads. This segment also provides gaming platforms, including Xbox hardware, Xbox Live, video games and third-party video games.

Microsoft sports a sizable $452.20 billion market cap. Shareholders receive a 2.5% dividend. The consensus price target is set at $59.59. Shares closed near that last week at $58.03.

Amazon

This company is the absolute leader in online retail and a dominate player in cloud storage business. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers. In addition, the company serves developers and enterprises through Amazon Web Services (AWS), which provides compute, storage, database, analytics, applications and deployment services that enable virtually various businesses.

AWS is the undisputed leader in the cloud now, and many top analysts team see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market. The company has had numerous recent product announcements, including Aurora for relational database engine, Quick Sight for business intelligence and AWS Database Migration Support Service.

Amazon has a market cap of $364.56 billion. The consensus price target is set at $870.33, and the shares closed most recently at $769.00.

Facebook

The huge social media leader posted second-quarter numbers that truly blew most of Wall Street away. Facebook Inc. (NASDAQ: FB) operates as a mobile application and website that enables people to connect, share, discover and communicate each other on mobile devices and personal computers worldwide. Its solutions also include Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application for mobile and web on various platforms and devices, which enable people to reach others instantly, as well as enable businesses to engage with customers; and WhatsApp Messenger, a mobile messaging application.

Facebook also develops Oculus virtual reality technology and content platform, which allow people to enter an immersive and interactive environment to play games, consume content and connect with others. As of December 31, 2015, it had 1.04 billion daily active users (DAUs) and 934 million DAUs who accessed Facebook from a mobile device. Most Wall Street analysts point to the fact that Facebook remains the top beneficiary of the adoption of mobile internet trends with total U.S. internet time spent on Facebook and Messenger.

Facebook has grown to an astounding $358.84 billion market cap in less than five years. The consensus price target for the stock is $153.71. Shares closed last Friday at $124.96.

The sheer fact that five of the biggest companies in the world by market capitalization are all U.S.-based and born speaks volumes about our capitalistic system. They were all started by visionary entrepreneurs who changed the way things are done, and they will continue to dominate in future years.