Stock market now has two $1 trillion companies: Amazon and Microsoft
The Seattle metro area is now home to the stock market’s only two trillion-dollar companies: Amazon joined neighbor Microsoft in that exclusive club Thursday.
Amazon briefly topped the trillion-dollar mark for the first time since September. At that time, both Amazon and Apple were worth more than a trillion dollars. Apple shares have since pulled back a bit. The iPhone maker is now worth about $920 billion.
Big Tech stocks have soared this year, despite concerns about the possibility of more regulation in the United States and worldwide as well as trade tension between the United States and China. So far, their sales and earnings growth have remained relatively strong.
Microsoft, which is now worth nearly $1.1 trillion, is the most valuable company on the planet. It has soared 36% thanks to optimism about its cloud business.
Amazon is up more than 35% and it has rallied as of late on optimism about its upcoming Prime Day shopping extravaganza. The was on a seven-day winning streak that came to an end Thursday.
Facebook shares are up more than 50%, while Apple is up 30%. Even Google owner Alphabet, which has been a laggard in the tech rally, is still up 10% this year.
The five largest companies now have a combined market value of $4.36 trillion. And Netflix, which often gets lumped in with the rest of the tech giants as part of the so-called FAANG stocks, is now worth $165 billion. It has soared nearly 45% this year.
But investors’ infatuation with tech — to the exclusion of many other stocks — is worrisome to Daryl Deke, the founding principal and CEO of New Market Wealth Management.
Deke said there has been a “massive gap” between how well Big Tech has done compared to other sectors. That’s not healthy — and it could burn investors who have too much of a focus on tech.
“Investors have been rewarded for concentrating and are being taught that diversification is bad. That’s not good for the long-term,” Deke told CNN Business.
But for now, it still looks like tech stocks are the hottest trade on Wall Street.