Why are so many of the same companies mentioned in the news day in and day out?
The scatterplot below might help explain why. The chart shows all 500 companies of the S&P 500 represented by light purple circles. In contrast, some of the largest companies are displayed in other colors. These highlighted companies each earned more than $20 billion in net income over the last 12 months, and several are worth over a trillion dollars.
- In the last 12 months, Apple’s profits are more than $100 billion, and it is valued at over $2.5 trillion.
- Berkshire Hathaway, which is run by Warren Buffett, earned over $80 billion and is worth over $500 billion.
- Google and Microsoft each generated net income of over $70 billion and each are valued well over $1 trillion.
- JPMorgan and Bank of America combined generated over $60 billion in net income and are collectively worth over $600 billion.
- Amazon is currently worth $1.25 trillion and made over $20 billion.
And now you know why these companies are so prominently featured in the news. They are behemoths in every sense of the meaning. When they hire or fire, enter new markets, create new products, or build new buildings, they have a deep and wide impact within their respective industries.
-Paul R. Rossi, CFA