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Today’s post is all about $100 billion companies.
The inspiration came from a conversation I had with Michael. He asked: “how many $100 billion companies are there in the S&P 500 by sector?”
The goal of today’s post is to not only answer his question, but to plot it over time, adjusted for constituent changes, back to 2005.
Let me be clear, I can’t tell you “I’m old enough to remember a world in which there were only a handful of S&P 500 companies over $100 billion in market cap.”
I’m not that guy as I’m sure you can assume from the name of this blog.
BUT I do know my way around an excel spreadsheet (not to brag) and am equipped with the data through our Bloomberg Terminal at Ritholtz Wealth Management.
Those are the only tools I need to answer Michael’s question.
The most difficult part of an analysis like this is normalizing for the actual company tickers over time. That takes the longest and is necessary for accurate results. We can’t just hold the tickers in the S&P 500 constant (starting today) given the high level of index turnover.
So 21 tabs, 9,490 rows, 13,078 columns, and 124,110,220 cells later, I have the data to chart for you all.
Here we go.
The chart below shows the total number of $100 billion companies in the S&P 500 back to 2005.
There are currently a total of 115.
At the 2008 low, there were only 8.
That’s a crazy stat, but let me one up it.
At the Covid-19 low, only 42 companies in the S&P 500 traded at a valuation above $100 billion. That number has nearly tripled since 3/23/2020.
Incredible.
What sectors do these companies belong to?
That’s what I’m showing you below.
31 tech companies, 19 financials, and 16 industrials/health care trade over $100 billion. About what I’d expect. Nothing too jarring.
But this next one smacked me in the face. I’m plotting the total number of $100 billion companies in the S&P 500 by sector over time.
Two things stand out to me.
1/ In Nov, 2008, there were literally 0 financials worth over $100 billion. It’s hard for me to conceptualize how devastating the GFC was, but this data offered me some perspective.
2/ Tech’s dominance is undeniable. The “Compound Blue” top slice of that chart above, representing technology, just keeps growing.
Lastly, I plotted the total # of $100 billion companies in the S&P 500 Tech Sector specifically over time.
Look at the meteoric rise from 8 at the Covid-19 low to 31 today, essentially a 4x increase.
These numbers just keep getting bigger and bigger.
That’s all for today. Thank you so much for reading and I hope everyone has a great weekend.