A dozen companies accounted for more than 80% of the increase in market capitalization of U.S. publicly traded companies. This leads us to question the validity of such significant growth.
The Big Dozen: Market Dominance
"The Big Dozen: Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta Platforms, Tesla, Eli Lilly and Company, Broadcom, Adobe, Salesforce, and AMD.
The Big Dozen are pure success stories, aggressively capturing market share, often creating entirely new market segments, achieving exceptional positions, and sometimes even establishing monopolies.
Financial Growth Trends
The financials are growing exponentially and are truly impressive.
Revenue for one year grew by 12.8% (the negative trend was interrupted in Q4 2022). Over two years, the growth was 25%, over four years (since Q3 2019), the growth was 88%, over ten years - a staggering 377%, and since Q3 2007 - growth by an incredible 1220%!
Three revenue trends can be identified: 2010 - 2016, then an acceleration from 2017 to 2019, a transition from 2020 to 2021, and stabilization from 2022. Current revenue is 28 - 30% above the 2017 - 2019 trend.
Operating income in Q3 2023 set a record of $120.4 billion, up 44.3% from a year ago, plus 32% over two years, 129% over four years, +430% over ten years, and +1130% since Q3 2007.
Net income will reach $104 billion in Q3 2023, slightly below the all-time high in Q4 2021 ($110 billion) - up 40% for the year, +27% for two years, +138% for four years, +491% for ten years, and +1320% for sixteen years.
The net margin is 21.7%, not that far off the 2021 high (23%) and above the average margin in 2017 - 2019 (17.1%).
Conclusion
While the results are robust, these represent exceptional success stories that have secured extraordinary positions in the market. For the majority, circumstances are considerably more moderate.