According to a recent analysis by Stocklytics.com, the market capitalization of the “Big Seven US Stock Companies” has surpassed 13 trillion US dollars, which is equivalent to the second-largest stock market in the world, after the US.

The so-called “Big Seven US Stock Companies” were first proposed by Bank of America analyst Michael Hartnett, including the seven tech giants Meta, Apple, Amazon, Alphabet, Microsoft, Nvidia, and Tesla. Last year, all seven stocks surpassed the S&P 500 index.

According to Stocklytics.com data, the $13.1 trillion market capitalization of these seven stocks has surpassed some of the most traded stock markets in the world, which is equivalent to the combined stock markets of Japan ($6.5 trillion), India ($4.4 trillion), and France ($3.2 trillion).

Impact on the US economy

The data drew the attention of Stocklytics financial expert Edith Reads. She said that this highlights the importance of the “Big Seven US stocks” to the US stock market and its listed indices.

Reads said, “These seven stocks are your top stock choices worldwide. Their market capitalization is higher than the vast majority of global stock markets, underscoring their importance to the S&P 500 index and the NASDAQ exchange.”

Currently, these seven stocks account for 1/4 of the market value of the S&P 500 index and more than 50% of the Nasdaq 100 index. As a result, Reads believes their dominance has been central to the growth and stability of the US stock market. In addition to Reads, some other analysts have similar views.

Already on the edge of the bubble?

The impressive returns of the “Big Seven US stocks” over the past few years have raised concerns about their excessive share in the stock market. Some commentators have even claimed that they already have all the traces of the bubble, is that right?

Smead Cole, CEO of capital management firm Smead Capital Management, said this is indeed the case. Cole believes that the current situation of the “Big Seven US stocks” is similar to the “Nifty Fifty” (Nifty Fifty) bubble in the 1970s. In that crash, 50 ambitious blue-chip stocks such as Kodak and Polaroid ultimately plummeted in value as inflation and interest rates rose.

Cole also listed a few major reasons for his conclusion. First, the stock in question is currently still strong in terms of fundamentals, just like the situation at the time. Second, the “Big Seven US Stock Companies” are already highly valued, the same as the original “Beautiful 50.” Finally, the current inflationary environment is also somewhat similar to that of the 70s of the last century.

bubble? It doesn't exist at all

However, an assessment by J.P. Morgan Chase paints a different picture. In a recent analysis, the company tried to ease people's concerns about a potential bubble, claiming that the valuation of the “Big Seven US stocks” is still relatively moderate compared to the overall stock market.

Of course, while admitting concerns about the strong growth of these seven stocks, this analysis also indicates that these stocks are indeed overpriced. However, compared to the traditional downturn cycle, the “Big Seven US stocks” are better able to adapt to this deceleration.