The list of the world’s biggest companies by market capitalization shows Apple and Microsoft to be the most valuable public companies.
Interestingly, the market capitalization of Apple and Microsoft has crossed the total market cap of all the stocks of the Russell 2000 index. The total market cap of Russell 2000 stocks was $2.23 Trillion on May 15, 2023, while the market cap of Apple and Microsoft is nearly $2.76 Trillion and $2.37 Trillion respectively.
The Russell 2000 Index tracks the performance of small-cap stocks in the US stock market. It contains around 2,000 of the smallest stocks depending on their market capitalization. The market cap of just two stocks, Apple and Microsoft, has overtaken the market cap of 2000 small-cap companies listed on the Russell 2000 index.
The big surge in prices of tech stocks witnessed recently is what has boosted the market cap of top IT stocks.
Here’s what Apple stock has delivered over the short term to a 12-month period:
1- month: 6.14%
3- month: 14.82%
YTD: 34.81%
1- Year: 27.31%
Here’s what Microsoft stock has delivered over the short term to a 12-month period:
1- month: 11.40%
3- month: 23.36%
YTD: 32.74%
1- Year: 26.05%
Also Read: The Big Risk! 50% of the Nasdaq 100 market cap is represented by just 8 companies
The Nasdaq 100 index which holds Apple and Microsoft amongst several other tech stocks is up by 20% this year. In contrast, the Russell 2000 Index is at the same level as it was a year before ( May 2022) and as in January 2023 (YTD). Compared to Nasdaq 100, the Russell 2000 is a diversified index with allocation into Industrial, healthcare and Financials industries. Shockwave Medical, Emcor Group, Iridium Communications, Saia, and Apellis Pharmaceuticals are the top 5 stocks of the Russell 2000 index.
Also Read: How Google, Microsoft navigate macroeconomic headwinds will be critical for the US big tech industry
Market capitalization is an important indicator that throws up the value of stock among the stock market investors. A large-cap stock is generally considered to be less volatile than mid or small-cap stocks. Small-cap stocks may be more volatile than large-cap companies, therefore, the risk-reward ratio should be examined before investing in them. Small-cap stocks are riskier than large-cap stocks since they are in the early stages of development and are often under-researched. Sticking to large-cap stocks and keeping a diversified portfolio is a better approach to generating high-risk-adjusted returns.
