How Tech Companies are Controlling the US Market and Why India does not have a single Tech Company in Top 10
US stock market is primarily driven by the tech companies and if you look at the current list of top 5 companies all of them are tech companies in US.
Apple 1.57 Trillion
Microsoft 1.55 Trillion
Amazon 1.43 Trillion
Alphabet 0.979 Trillion
Facebook 0.675 Trillion
But that was not the case 10 years back. It was primarily controlled by Oil and Gas companies and Investment Banks and major banking organizations. But in the last 7 years things have changed drastically and in 2020 we have only tech companies among the top 5 US companies by Market Cap. The Pivotal year of this change was 2018, when for the very first time all the companies in the list are all tech companies.
Facebook got an entry into the top 5 list in 2018 and below is the market cap in 2018.
Apple Inc. 909 Billion
Amazon 824 Billion
Alphabet 774 Billion
Microsoft 757 Billion
Facebook 562 Billion
However, if you go back to 2014, you will not find Amazon and Facebook in that list and Exxon Mobil was the 2nd most valuable company in terms of market cap. Today it is not even in top 20. It is pretty evident that Tech companies are going to rule the market and the market cap of these big tech companies have trippled in last years.
Below is the market cap of top 5 companies in 2014.
Apple Inc. 560 Billion
Exxon Mobil 432 Billion
Google 358 Billion
Microsoft 340 Billion
Berkshire Hathway 312 Billion
Watch the video of how it evolved over the years:
But when it comes to India there are not even a single tech company in top 20. There are IT services companies but they can’t be categorized as tech companies as they are dependent on the business of their clients and do not have any significant product that drives their revenue.
Below are the top 10 companies in India in terms of market cap:
| 500325 | RELIANCE INDUSTRIES LTD. | 2155.85 | 1366680.52 |
| 532540 | TATA CONSULTANCY SERVICES LTD. | 2205.80 | 827701.02 |
| 500180 | HDFC Bank Ltd | 1079.05 | 592428.51 |
| 500696 | HINDUSTAN UNILEVER LTD. | 2221.25 | 521893.80 |
| 500209 | INFOSYS LTD. | 947.95 | 403760.00 |
| 500010 | HOUSING DEVELOPMENT FINANCE CORP.LTD. | 1852.30 | 321300.92 |
| 532454 | BHARTI AIRTEL LTD. | 559.30 | 305129.32 |
| 500247 | KOTAK MAHINDRA BANK LTD. | 1322.45 | 261686.98 |
| 500875 | ITC LTD. | 196.25 | 241235.04 |
| 532174 | ICICI BANK LTD. | 358.50 | 232169.79 |
All the companies in this list are either banks, FMCG, IT services or Oil and Gas companies. There are not a single tech company in the list of top 20. There are many copy cats who are doing relatively good but are not in the market and definitely not big enough to be among the top 100. Definitely there is lack of innovation and real breakthrough technologies are not coming from India.
Let’s hope this changes in future and the current pandemic give impetus to this.
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