Companies on top list

You heard the news: propelled by the AI frenzy, the chipmaker Nvidia passed the $3 trillion market cap and became the most valuable company in the world by market capitalization—for a few days last June, that is. Since then, things have returned more or less to what they used to be: as of September 3, 2024, when the market closed, Apple was still the king of the stock exchanges, closely followed by Microsoft. Incidentally, that was also the day when, amid a stock selloff, Nvidia lost $279 billion in market value, the largest wipeout in U.S. history (while still managing to retain the third spot).

Then again, Apple’s dominance is not to be taken for granted. After all, over the years, it lost the title of the world’s largest many times—more frequently, and very recently too, to Microsoft, but also to Amazon, Google, and even Saudi Arabia’s state oil giant Aramco. Market capitalization can change quickly, and in recent years the rankings of the world’s largest companies have seen some significant shifts.

How these companies get to the top, and how they get to stay there, has changed too. For years, Apple has often seen its market cap fall victim to its sales success. While the popularity of products such as the iPhone, Mac and iPads propelled Apple to new heights, whenever sales appeared to slow its market capitalization suffered.

By contrast, Microsoft built itself into one of the world’s largest companies with a focus on steady recurring revenue streams. You might not need a new smartphone or laptop every year, but a software license, cloud-computing package or video game subscription means ongoing payments—and client stickiness.