Feb 7, 2020 - Economy & Business

The 5 biggest U.S. stocks account for almost 18% of the S&P 500's market value

Axios

Illustration: Lazaro Gamio/Axios

The five biggest U.S. stocks — Apple, Microsoft, Alphabet, Amazon and Facebook — have grown so explosively that they account for nearly 18% of the S&P 500 index by market value, AP reports.

Why it matters: Never before have five companies held such powerful sway over the index, according to Morgan Stanley strategists.

The history: The last time five stocks controlled this much of the S&P 500 was during the tech bubble at the turn of the millennium.

  • That bubble eventually popped, and stocks like Cisco and GE shrank to become smaller players. Microsoft was also among them, but it has since climbed back to the top.

One difference between this time and the dot-com bubble is that many analysts don't see prices as grossly over-inflated now.

  • Each of today's Big Five is producing strong growth even when the global economy has been stuck in a sluggish pace for years.

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Data: FactSet; Chart: Axios Visuals

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Details: The company's stock rose 2.6% to boost its market capitalization to $1.435 trillion. The last time Microsoft was the most valuable U.S. company at the market's close was Oct. 30. Prior to that, Microsoft was the most valuable for 127-straight sessions, from April 18 through Oct. 17, according to MarketWatch. Year to date, Microsoft's stock has jumped by 19.7%.

Go deeper: The 5 biggest U.S. stocks account for almost 18% of the S&P 500's market value

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Data: FactSet; Chart: Axios Visuals

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Why it matters: That is a far cry from the estimated earnings decline of -1.7% at the end of the quarter. If it holds, this would mark the first time the index has reported year-over-year growth in earnings since Q4 2018. 

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By the numbers: So far, 22% of S&P companies have revised first-quarter profit targets higher, the highest percentage since Q2 2018 and third-highest since 2012, Bloomberg data show.

Go deeperArrowFeb 7, 2020 - Economy & Business