The Wall Street Journal recently recapped the status of companies with the largest market value (aka market capitalization or market cap) in 2015. And while Apple is still number one, its market cap actually declined as their stock performed much like the rest of the market in 2015. On the other hand, both Alphabet (the new holding company for Google) and Microsoft’s market cap grew to close the gap between the tech giants.
To briefly describe market cap, it is the overall market value of a company’s stock. That is if you add up the value of each and every share of a company, or simply multiply share price by number of shares in the market, you get the total value of company’s stock on the market.
Apple topped the list with a market cap of slightly below $600 billion in a couple of recent trading sessions towards the end of 2015. While this makes Apple clearly the leader by tens of billions of dollars, it started the year with a market cap of about $640 billion, and is down from a peak of $750 billion in the spring. There was even discussion if Apple could become the first company to reach a market cap of $1 trillion (which it very well still could). But as the Wall Street Journal points out, Apple’s stock price has slightly dipped towards the end of the year due to concerns by investors with near-term demand for Apple’s most profitable product, the iPhone.
Alphabet on the other hand saw an exceptional year, with a 45% growth in its stock price. This brought the Mountain View tech company up to the number 2 spot for valuation with a market cap of around $530 billion at the end of 2015.
Investors also responded positively to Microsoft in 2015, with growth in stock prices of nearly 18%. There were a few dips in late January and late August, but on the whole, Microsoft’s stock prices have risen to levels near where the company was in 2000; when Microsoft held the title of largest market cap.
The new year should bring an interesting competition between the three biggest tech companies as the gap between market capitalization narrows.Further reading: Alphabet, Apple, Google, Microsoft