- Over time, the dynamism of the US economy separates the winners from the losers.
- Today’s winners have enviable fundamental characteristics.
- If history is a guide, tomorrow’s winners may look very different.
“The four most dangerous words in investing are ‘It’s different this time’.”
- Sir John Templeton
As investors, we tend to get caught up in the here and now. That definitely was the case as of the time of this writing, with Nvidia reporting earnings that were significantly better than expected and continuing to capture the mood of today’s market with its focus on AI (Artificial Intelligence) and the optimism surrounding it.
It is common knowledge in today’s market that the largest companies, sometimes referred to as the Magnificent 7 (Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta), make up a growing percentage of the US equity market. Given the fundamentals these companies exhibit, that may be the case for some time to come. But, if we look back historically, the largest companies in the US don’t tend to stay on that lofty perch.
If there is one thing that is certain in the US economy, it is that companies that are successful will always attract competition. Those of us of a certain age all remember the late 1990s when the Nokia mobile phone was a must have, only to be replaced by the Blackberry in the early 2000s and then the iPhone in recent years. If there is anything that is constant and unchanging, it is the fact that companies earning high returns will always attract competition.
So for posterity, we thought we’d remind readers of the largest companies in the Bloomberg 500 over three periods. First, March 2000, when the dot-com euphoria was at its peak. Second, October 2007, when global growth had rewarded a different cohort. Finally, the end of April 2024, as we witness the dawn of AI.
Top Ten Weights in the Bloomberg 500
| |
March 2000 |
October 2007 |
April 2024 |
| 1 |
Microsoft |
Exxon Mobil |
Microsoft |
| 2 |
General Electric |
General Electric |
Apple |
| 3 |
Intel |
Microsoft |
NVIDIA |
| 4 |
Cisco |
AT&T |
Amazon.com |
| 5 |
Walmart |
Proctor & Gamble |
Alphabet* |
| 6 |
Pfizer |
Bank of America |
Meta Platforms |
| 7 |
Oracle |
Citigroup |
Alphabet* |
| 8 |
IBM |
Cisco |
Eli Lilly |
| 9 |
Citigroup |
Chevron |
Broadcom |
| 10 |
Nokia |
Johnson & Johnson |
JP Morgan Chase |
* Alphabet appears twice due to the dual share classes of GOOG and GOOGL.
Source: Bloomberg, as of 04/30/2024
Microsoft is the only company that has remained in the top ten in each period, which brings us to the moral of the story. If history is any guide, the biggest winners a decade or more out are likely to be different than today’s winners. We don’t have a crystal ball as to the staying power of those at the top of the food chain today, but it’s more than likely that the dynamism of the US economy will continue to keep us guessing as to who might win in the future.
Important Disclosures & Definitions
Bloomberg 500 Index (B500): the B500 is Bloomberg’s US Large Cap Price Return Index that contains the 500 most highly capitalized US companies weighted by float market cap. One may not invest directly in an index.
AAI000697 05/28/2025
