(News Bulletin 247) – The market capitalization of the world’s top 100 companies reached $40,000 billion at the end of March 2024, a record level for five years. A progression notably led by the United States with the excitement around artificial intelligence. France maintains its fourth place.

The first three months of 2024 were good on the markets. Global indices have broken new ceilings, supported by hopes of rate cuts in Europe and the United States. They were also towed by the largest listed groups. This is shown by the latest edition of the “Global top 100 Companies by market capitalization” study, carried out by the consulting and auditing firm PwC.

At the end of March 2024, these 100 most valuable groups in the world collectively weighed 39.971 billion dollars, compared to 31.433 billion in March 2023, an increase of 27% over one year, or the equivalent of 8.438 billion dollars.

“This increase made it possible to recover the losses recorded the previous year thanks to the stabilization of the macroeconomic situation and the return of investors’ appetite for stocks,” notes the consulting and auditing firm PwC.

The AI ​​boom

Another notable fact from this study is that the market capitalization of the top 100 has almost doubled over the last five years, a pace which resulted in a compound annual growth rate of 14%. This clear progression was driven by the United States (28,800 billion dollars of capitalization in the top 100), which continues to be the main contributor to the world top 100 ahead of Saudi Arabia (1,991 billion) and China (1,837 billion).

Partner specializing in capital markets at PwC France and Maghreb, Philippe Kubisa notes that over the last 12 months, “investor appetite for equities has returned and global equity valuations have seen a sharp increase in demand for due to rapid developments in artificial intelligence (AI). The Magnificent Seven contributed 54% to the year-on-year increase in the combined value of the world’s 100 largest companies, says PwC

“AI has the potential to change the way the world works and has the potential for significant value growth for companies that are able to harness its potential. The top 100 has already experienced this effect, reaching an all-time high of $40,000 billion as of March 31, 2024, almost double the value of the Top 100 as of March 31, 2019,” he continues.

The firm also lists 13 new entrants in the top 100. This implies that 87 companies have retained their place in this top 100, whose threshold to appear there has increased by 16% to reach 141 billion dollars.

The domination of the United States

As of March 31, the United States therefore outrageously dominated this list, with top names which collectively weighed 28,785 billion dollars, or 72% of world capitalization, compared to 67% a year earlier. Unsurprisingly, the podium of the world’s largest capitalizations is in fact exclusively made up of American technology giants.

Microsoft and its capitalization of 3.126 billion dollars dominates the ranking followed by Apple which stands at 2.648 billion, and Nvidia (2.224 billion dollars) in third place. The graphics card specialist recorded the strongest growth of all companies in the top 100 (225%), entering the top five for the first time, recalls PwC.

In fifth place we find Alphabet (Google) which is approaching 2,000 billion, followed by Amazon (1,874 billion dollars) and Meta, the parent company of Facebook (1,238 billion dollars).

On the other hand, times were still difficult for the financial centers of China and its region. The listed Chinese companies present in this top 100 saw their valuation crumble by 15% to 1,387 billion dollars, “the economic headwinds in the region having had a negative impact on investor sentiment”, specifies PwC.

Luxury still the majority in France

Which also benefited Saudi Arabia. With its only representative Saudi Aramco, in this top 100 (1.991 billion), Saudi Arabia managed to take second place behind the United States, taking advantage of the gap in the largest Chinese companies listed on the stock exchange. Chinese digital heavyweights like Alibaba (-31% over one year) or Tencent (-22%) thus suffered significant losses between March 2023 and 2024.

As for our French flagships, luxury remains the overwhelming majority in this ranking of the top 100, with LVMH (19th) followed by Hermès which makes a breakthrough to 38th place, then L’Oréal (41st), and Christian Dior (88th). Totalenergies, which is considering making the New York Stock Exchange its main trading place to the detriment of that of Paris, is in 76th place in this Top 100. These are therefore all star stocks which allow France to remain in fourth place. place in the ranking, with a market capitalization of 1,286 billion dollars.

Note that Airbus is ranked 95th, with a market capitalization of $145 billion, but PwC considers the aeronautical group to be Dutch, perhaps because the company has its legal headquarters in the Netherlands.

The United Kingdom ($792 billion) retains its fifth place, when the value of companies from other regions represented in the top 100 increased by 12%, to $3,659 billion.

Note the breakthrough of the Netherlands in this ranking, which climbed into the top 10 (9th). The great champion of the Dutch stock market remains ASML (378 billion dollars), which is also the third largest company on the stock market in Europe, behind the Danish Novo Nordisk, which has also stolen the French group LVMH (2nd) as much. coveted place of first European capitalization in September 2023.

Europe therefore has nothing to be ashamed of in the face of the American behemoths. Companies from the Old Continent present in this top 100 of the most valuable groups in the world saw their collective capitalization jump 14% over one year to amount to 4,770 billion dollars.

AI is a key figure in the technology sector

In terms of sectors of activity, technology in the broad sense (including specialists in semiconductors, electronics or payments) further increases its importance with 22 companies present in this Top 100. It now represents 33% of the total capitalization of companies in this world ranking, i.e. a combined market capitalization of $13.22 trillion.

This sector also recorded the largest absolute increase in market capitalization, with an increase of 50% during the year. This progression can therefore be explained by the growing interest in artificial intelligence.

The health sector is represented by 15 mainly American companies with Eli Lilly (9th) whose stock gained 126% over one year, UnitedHealth (18th), Johnson & Johnson (23rd) and Merck (29th). Just like the financial services sector, followed by consumer discretionary with 13 companies and communication services, with 9 companies concerned.