The market value of the six largest American technology companies is already more than 12,300 billion dollars. Do we understand what it means for us in practice, asks Juha-Pekka Raeste, HS's financial editor.
Stateside investors have recently started to call the stock exchange's six companies with the most valuable market value by the term The Magnificent Six [Mahtava kuusikko].
These companies are, in the current order of magnitude, Microsoft, Apple, Google's parent company Alphabet, Amazon, Nvidia and Meta Platforms.
Previously, Tesla was also included, and this seven was called by name The Magnificent Seven.
The term is familiar from western movies as well as other brave sevens throughout time. It's also by The Clash hit. There are seven references for example, for continuous morning awakenings: “Ring, ring, it's 7:00 AM / move yourself / to go again.”
Last in the world's most followed stock index S&P 500 rose by more than 24 percent.
A significant part of the increase has just been explained of the Magnificent Seven and nowadays above all of the Magnificent Six with a price increase.
The combined market value of the six most valuable technology companies was a staggering 12,336 billion dollars, or about 11,415 billion euros, calculated at Friday's closing prices. The calculation is based on data from the information service Refinitiv.
At the end of 2022, the combined market value of the companies was more than 6,530 billion dollars. of the Magnificient Six or The Super Six so the value has almost doubled in just a few years.
The technology giants have brought fabulous returns to their owners. Over the past year, out of the seven, Nvidia's stock was the most profitable, benefiting from the company's buying frenzy of artificial intelligence processors. Its value more than tripled.
According to Refinitiv, the company's share price has risen by more than 353 percent compared to the end of 2022. The second best return was for Metalla, which owns Facebook, Instagram and Whatsapp, among others. Its stock has swelled by 295 percent in the same time, boosted by Friday's huge rise.
Electric car company Tesla is running out of six rides. This year, the company's share price has fallen by more than 24 percent
Tesla's share price has recently suffered from the intensified competition of electric cars on the global market and, above all, from the strong rush of Chinese electric cars to the market.
Tesla's prowess in technology and artificial intelligence development may well catapult it back into the ranks of the world's top seven tech companies.
Next year is Tesla's CEO Elon Musk's including, among other things, the first deliveries of the humanoid robot Optimus.
The company is also estimated to be strong in the development of neural networks. They try to imitate the functioning of the human brain and the ability to learn.
Even eight technology companies are already lurking in the background of Tesla.
The Taiwanese semiconductor manufacturer Semiconductor Manufacturing Company (TSMC) is already close to Tesla with its market value of more than 600 billion dollars.
Of these however, instead of the mutual competition between technology giants, it is worth focusing attention on how quickly a handful of technology companies are strengthening their grip on the world and its wealth.
Whoever controls technology controls the world. Nation-states know that well. That's why these companies are worshiped and feared.
Helsingin Sanomat interviewed the chief analyst of Blackrock, the world's largest asset manager, a couple of weeks ago Wei Li predicted that the earnings improvement prospects of these companies have improved in the long term, largely due to the prospects of artificial intelligence development.
One way to understand the importance of technology giants, which are becoming more and more valuable, is to try to relate their market values to other listed companies.
The market value of US listed companies currently covers more than 60 percent of the wealth of the world's stock exchanges.
The market value of the S&P 500 companies, calculated at Friday's closing prices, was a total of approximately 44,260 billion dollars. Mahkiusiko's share of this is already about 28 percent.
Even Germany, the European economic engine, pales in comparison. According to Refinitiv, the combined market value of Germany's 40 largest listed companies is approximately 1,216 billion euros, or approximately 1,314 billion dollars.
In this race, Finnish listed companies are far beyond the decimal point. Nokia's market value is 18.7 billion euros, or slightly more than 20 billion dollars.
The combined market value of all companies on the Helsinki stock exchange is approximately 256 billion euros, or less than 280 billion dollars.
Others too comparisons can of course be made for fun.
The Finnish government's budget for 2024 is 88 billion.
If the owners of the super six decided in a collective mental disorder to donate their shares to the people of Finland, by selling the shares, the expenses of the Finnish state could be paid for more than 120 years at the current rate.
Taxes and fees would not need to be collected at all.
Or the funds could be distributed to all Finns at the same time.
For once, it would really be a lottery win to be born in Finland – everyone would get more than 2.2 million dollars, or more than 2 million euros!
Butter so to say that the investors have already chosen their winning horse.
American tech giants are already so big that it's hard to even fathom without laughing.
It is up to small investors and citizens of different countries to see which of them will rise to the top in their own championship league at any given time.
Americans technology companies are also in a class of their own internationally.
With their market value, only oil companies from the Middle East and China can compete.
The governments of different countries and state unions like the EU can of course do what they can, so that even with legislation they could somehow put a stop to these giants.
At least for now, the American super six seems to continue to snowball. Time will tell what the citizens' power is enough for in this game.
The author has written a book dealing with the theme, The World's 50 Most Dangerous Companies (Otava 2022) with Hannu Sokala.
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