Big tech is dominating stock market indices

Tech → Big tech → Huge tech

Big tech has gained $3.8 trillion in market cap this year

6/13/24 7:07AM

For much of this year headlines (including our own) have been devoted to the rise of Nvidia, and rightly so: its valuation is mind-boggling and it has almost single-handedly driven 2024’s “AI theme”.

But, the rest of big tech has also been rising. Indeed, even Apple is now enjoying the “announce an AI product and watch your stock price go up” phenomenon, with its shares up some 14% in the last month. So, how much has big tech gained in 2024?

As of yesterday’s close (June 12th), just 6 stocks have added an eye-watering $3.8 trillion in market capitalization. The rest of the S&P 500, the flagship index of America’s biggest public companies, have collectively added just $1.78 trillion. Nvidia alone has gained more than that ($1.86T).

This is pretty remarkable. Just a few years ago, we would often make charts when certain companies crossed the $1T or $2T mark — milestones that once seemed unfathomable, but are now commonplace —as big tech increasingly dominates the largest stock market indices in America.

Amazon is worth nearly 4 Walmarts. Microsoft is worth 59 General Motors. Nvidia is worth 16 McDonald’s. These comparisons are mostly meaningless, but there’s very few companies big enough to make worthwhile observations. In fact, you have to start zooming out to find economic entities of an equivalent size: just 3 of those big tech stocks — Nvidia, Microsoft, and Apple — are bigger than the entire Chinese stock market. The whole thing.

Does this matter?

Yes. Apart from making a lot of big tech employees and shareholders very rich, the rise of big tech is fundamentally altering the world of investing. Research analysts at Morgan Stanley estimate that stock market concentration is near the highest it’s ever been, although there is precedent for similar levels of concentration if you trace the data back to the 1960s (or beyond). Increasingly, what happens to big tech is what happens to the market.

Luke Kawa9h

Texas Instruments soars as Q1 guidance exceeds estimates and CEO touts “a lot of room to go” on industrial recovery

Texas Instruments soared in after-hours trading as better than expected Q1 guidance outweighed a mediocre set of Q4 results.

The chipmaker sees current quarter sales ranging between $4.32 billion to $4.62 billion, the midpoint of which is slightly north of the consensus estimate for $4.42 billion. The outlook for earnings per share of $1.22 to $1.48 also compares favorably to Wall Street’s call for $1.26.

For Q4, sales of $4.42 billion were a tad below the consensus call for $4.43 billion, while earnings per share of $1.27 came in three cents light of the Street’s view. However, earnings per share included a six-cent hit that was not incorporated into the company’s guidance, Texas Instruments said.

Managing expectations had not been Texas Instruments’ strong suit as of late: the stock sank after the firm reported Q3 results since Q4 guidance was weak. And during the conference call that followed Q2 earnings, three separate analysts remarked that CEO Haviv Ilan’s “tone” wasn’t too upbeat despite better than expected financials and decent guidance.

This time, the outlook and commentary is all sunshine and rainbows.

“The first quarter guidance is significantly stronger than seasonal,” remarked Deutsche Bank analyst Ross Seymore. “And if my math is right, it seems like it's the first time you've guided up sequentially since right after the financial crisis 15 years ago, roughly.”

Ilan credited this to a persistent recovery in industrial demand, which accounts for about one third of the company’s sales.

“Remember that on the industrial market, we still have a lot of room to go when you think about the previous peaks,” he said. “So, if you will, the compare, it's still easy for industrial to continue to recover.”

And then, of course, there’s AI. Data center revenues are a small but briskly growing part of TI’s business, accounting for 9% of sales for the full year while surging roughly 70% year-on-year in Q4.

Seagate beats expectations on sales and EPS

The guidance was strong, too.

Matt Phillips12h

Tasha Matsumoto

12h

S&P 500 climbs to new all-time high ahead of Big Tech earnings

Meta, Microsoft, and Tesla will report after the bell tomorrow.

Matt Phillips14h

Satellite stocks surge on “sovereign space” plans

Planet Labs is on pace to notch its second 10% gain of the month early Tuesday afternoon, adding to its astronomical run of more than 500% over the last 12 months.

Wedbush Securities tech analyst Dan Ives hiked his price target for the stock to $30 from $28 after hosting a series of meetings with the company and investors in California. Ives wrote:

“[Planet Labs] is seeing massive success through its improved GTM selling motion as the company is providing mission-critical use cases for a wide array of government applications with defense & intelligence, with more international agencies seeing the value in PL’s satellite fleet for situational and maritime domain awareness in real-time as the company is benefitting from increasing defense budgets and the urgent need for international countries to reduce its reliance on the US.”

That commentary is consistent with recent news reports that the German military is planning to build what the Financial Times calls the “the equivalent of Elon Musk’s internet service for the German armed forces.”

A separate report in The Wall Street Journal on Monday said, “Spending on space-related projects is expected to rise in many countries, giving companies new opportunities to sell their wares and services.”

Behind this push, in part, is the fact that the roughly 80-year-old NATO alliance is is under unprecedented strain due to, among other things, US President Donald Trump’s fixation on somehow acquiring the Danish territory of Greenland.

Other space plays seem to be benefiting from similar dynamics, with Rocket Lab and AST SpaceMobile both up solidly on the day.

Governments’ New Must-Have: Their Own Satellites

“[Planet Labs] is seeing massive success through its improved GTM selling motion as the company is providing mission-critical use cases for a wide array of government applications with defense & intelligence, with more international agencies seeing the value in PL’s satellite fleet for situational and maritime domain awareness in real-time as the company is benefitting from increasing defense budgets and the urgent need for international countries to reduce its reliance on the US.”

Other space plays seem to be benefiting from similar dynamics, with Rocket Lab and AST SpaceMobile both up solidly on the day.

Matt Phillips17h

Corning-Meta deal reignites optical connections trade

Corning’s $6 billion deal with Meta to provide fiber-optic cable connections for its AI data centers is reigniting an AI-related trade that’s been stalled out over the last month.

Fellow opto-electrical makers of plugs, cables, and various doodads needed to connect data center servers — such as Amphenol, Coherent, and Lumentum — are also soaring Tuesday.

Such stocks ripped in the second half of 2025 before the rally sputtered out in the first half of December. But the amount of money Meta plans to shower on Corning has clearly cheered up competitors — and investors — in the space today.