The stock market experienced a rebound in the first half of 2023, following significant losses in value in the previous year. The surge in prices was attributed to AI euphoria. Despite this increase, the dominance of US corporations remained unchanged. Two German companies, SAP and Siemens, made it into the list of the 100 most valuable companies in the world. The combined market capitalization of the top 100 companies rose by 20% to $34.4 trillion by mid-year, nearly recovering the massive losses from the previous year. The technology sector, which saw a 45% increase in market capitalization to over $13 trillion, played a significant role in this surge. No other industry achieved a comparable increase in value. These findings were revealed in Ernst & Young’s (EY) latest analysis of the world’s most valuable companies, conducted every six months and based on data as of June 30, 2023.
According to EY’s research, the global enthusiasm surrounding artificial intelligence is driving the boom in technology stocks. Investor interest stems from the potential prospects these companies offer, even if the actual successful business models remain uncertain. The price performance of relevant technology stocks highlights this trend, with Nvidia’s market value increasing by almost 200%, propelling the US chip manufacturer from the 17th to the 6th spot on the list of most valuable companies. Established corporations involved in AI solutions also benefitted from this boom, with Meta (formerly Facebook) increasing its market capitalization by 133%, while Apple, Microsoft, and Alphabet saw increases of 48%, 42%, and over 33% respectively.
The number of US companies in the top 100 list rose from 61 to 62, reaffirming the country’s dominance. Among the top ten most valuable companies globally, nine are based in the US. Apple retained its position at the top of the list with a market capitalization exceeding $3 trillion, the only company to achieve this milestone. Last year’s short-lived displacement by Saudi Aramco was ultimately temporary, as the Saudi oil company also fell behind Microsoft in the current rankings. The most valuable European company, LVMH, a French luxury group, secured 12th place. After a year-long absence, two German companies returned to the top 100 rankings. SAP climbed 35 spots to 71st place, with a market capitalization of $159 billion, while Siemens jumped from 115th to 91st place and was valued at almost $132 billion.
In summary, the stock market experienced a resurgence in the first half of 2023, driven by the AI boom and led by US corporations. Technology stocks played a crucial role in the market’s recovery, with Nvidia standing out as one of the most highly valued companies. Additionally, both established corporations and newer companies in the AI sector reaped the benefits of the market upswing. Despite global uncertainties, the overall picture for the stock market remained positive, with increased valuations and the inclusion of SAP and Siemens in the top 100 list indicating sustained growth.
