Life at the Top

The S&P 500 Index continues to close at record highs, with Apple ranking as the largest company in the index based on market capitalization. This week, we look at historical data going back to 1990 and track the largest company by market cap at the end of each month. In the chart, we plot the number of consecutive months each company ranked as the largest. Interestingly, over the past 34 years, there have only been seven companies to hold the title as largest using this methodology – IBM, Exxon Mobil, Walmart, GE, Microsoft, Apple and Amazon. Three additional companies (Cisco, Alphabet and Nvidia) briefly ranked as largest when looking at daily data: Cisco for two days in March 2000, Alphabet for one day in February 2016 and, recently, Nvidia for one day in June of this year.

Historically, the largest company often remains at the top for an extended period of time. For example, GE, Exxon Mobil and Apple all ranked as the largest for more than 60 consecutive months. GE was the largest public company for a total of 120 months, Exxon Mobil for 109 months and Apple for 127 months. Indeed, it can take a long time to challenge and eventually replace the top company in the world.

However, things do change over time. In the early ’90s, IBM was the largest public company, with a market cap of $60 billion to $70 billion. Today, it ranks as the 48th largest stock in the S&P 500. Similarly, GE currently ranks 41st. Exxon Mobile, the largest oil company, has a market cap of half a trillion dollars – just one-sixth the size of the top three tech companies (Apple, Microsoft and Nvidia).

Since July 2013, technology companies have held the top spot, with either Apple, Amazon, Microsoft or, more recently, Nvidia being the largest. While valuation concerns have many investors questioning the precipitous rise in tech stocks, history shows that the leaders can remain at the top for quite some time.

References to any specific security or company names are for illustrative purposes only and should not be considered investment advice or a recommendation for any particular security, strategy or investment product.  DoubleLine may or may not own the securities referenced and, if such securities are owned, no representation is being made that such securities will continue to be held.