LONDON: With Google parent Alphabet becoming the latest entrant to Wall Street’s trillion-dollar club, Europe’s blue-chip companies are dwarfed by comparison — the most valuable firm from the “old continent”, Nestle, is worth just a third of that.
Alphabet surged past the US$1 tri mark late on Thursday (Jan 16), joining Apple, Microsoft and Amazon, which had breached that level in 2018 before giving up some of those gains.
Add Facebook (current worth: US$630 bil) and you get a group with a combined market cap of US$5.2 tri, more than the combined US$4.6 tri value of the STOXX 50 European index.
Comparing entire benchmark stoc indexes, the US S&P 500 has a US$27.5 tri price tag, almost three times the US$10.1 tri on the pan-European STOXX 600 .
There is no place for Europe at the global top 10 table where the cheapest company, JPMorgan, scrapes in at US$430 bil, well above Nestle’s US$315 bil.
The main culprit for the huge discrepancy is Europe’s lack of a digital bellwether stock to match the past decade’s tech boom, spearheaded by the US ‘FAANGs’ (Facebook, Amazon, Apple, Netflix, Google) and China’s ‘BATs’ (Baidu, Alibaba and Tencent).
The FAANGs have transformed the US equity landscape, with the Top 5 US stocks accounting for almost a fifth of the market cap of the whole S&P500. – Jan 18, 2020, Reuters
