Most Valuable Companies in the World
Apple regained its crown as the most valuable company in the world in 2024, edging competitors like NVIDIA and Microsoft with a fierce race.
The iPhone maker reclaimed the top spot after intense competition, during which NVIDIA briefly held the lead due to the surging demand for its AI-driven technology. However, Apple’s strategic release of the iPhone 16, and its continued dominance in hardware and services, solidified its position once again.
This resurgence highlights Apple's unmatched capability to combine technology and user experience, ensuring its products remain at the forefront of consumer demand.
Why Most Profitable and Most Valuable Aren't Synonymous
The most profitable companies are those with the highest difference between revenues and expenses. Profit is essentially what the company "takes home" after all taxes and expenses are paid. In this case, Saudi Aramco is the most profitable company in the world, as they had almost $250 billion in profit in 2023.
On the other hand, the most valuable companies are assessed based on a broader set of criteria, including future earnings, market share, and other factors.
Essentially, a company's value can be viewed as its potential selling price, factoring in future potential and earnings. As of October 21, 9 companies ranked to be the most valuable companies in the world each had a market capitalization of over $1 trillion.
Market capitalization, or market cap, is calculated by multiplying the current stock price by the total number of outstanding shares. For instance, a company with 2.34 billion shares selling at $66.66 per share would have a market cap of $156 billion.
Investors use market cap to quickly estimate a company’s overall value and compare it with others. Companies are categorized by market cap into mega-cap (over $100 billion), large-cap ($10 billion-$100 billion), mid-cap ($2 billion-$10 billion), small-cap ($300 million-$2 billion), and micro-cap (under $300 million).
Market cap is popular because it’s easy to calculate and reflects market perception by incorporating investor sentiment and growth expectations. It also aids in comparing companies of different sizes and industries and generally correlates with liquidity. However, the market cap alone doesn't paint a comprehensive picture of a company’s value or financial health. Other valuable metrics include:
Enterprise Value (EV) – A more inclusive measure that combines market cap with debt and subtracts cash.
Revenue and Earnings – Indicators of the company's operational success and profitability.
Price-to-Earnings (P/E) Ratio – Compares share price to earnings per share, helping to evaluate if a stock is overvalued or undervalued.
Book Value – Represents net asset value, useful for assessing asset-heavy companies.
While market cap is essential for identifying the most valuable companies, it should be assessed alongside other financial indicators for a fuller understanding.
8 Most Valuable Companies in the World
Courtesy of: https://companiesmarketcap.com/ as of October 21, 2024
1) Apple
Apple Inc. continues to hold its position as the most valuable company in the world, a status reinforced by its immense market capitalization, which consistently tops global rankings. Apple leads with a market cap of $3.572 trillion, a testament to the company's sustained innovation, brand loyalty, and strategic product launches. Its dominance is largely driven by the success of its flagship product lines, including the iPhone, Mac, and other hardware, as well as its thriving services sector.
A major contributor to Apple’s success in recent years has been the continuous evolution of its iPhone series, and the latest release—the iPhone 16—has been essential in driving record sales. The iPhone 16 has introduced cutting-edge features, such as improved camera capabilities, battery life, and software integration, further strengthening consumer demand. These enhancements not only cater to the tech-savvy but also appeal to the average user looking for seamless performance and high-quality devices.
The release of the iPhone 16, alongside Apple's robust product ecosystem, has directly contributed to the company maintaining its dominance in market capitalization. Its ability to command the global market stems from its consistency in innovation, particularly within its smartphone division which solidified its position as the most valuable company globally. Its capacity to blend innovation with user experience while consistently delivering products that resonate with a broad audience sets it apart from competitors, securing its dominance in the market.
2) NVIDIA
NVIDIA has solidified itself as the second most valuable company in the world, with a current market capitalization exceeding $3.4 trillion. Its rise has been driven largely by its dominance in the semiconductor and artificial intelligence (AI) sectors, which have positioned the company at the forefront of technological advancements in areas like gaming, data centers, and autonomous vehicles. Its rapid growth has placed it just behind Apple, reinforcing its position as a key player in the global economy.
Remarkably, in June 2024, NVIDIA briefly surpassed Apple to claim the title of the world's most valuable company, a significant milestone fueled by surging demand for its AI chips.
NVIDIA's involvement in the AI revolution, particularly with its GPUs powering cutting-edge AI and machine learning applications, has created a generational opportunity. Analysts, such as those from Bank of America, predict that this could propel the company towards an astonishing $5 trillion valuation shortly, underscoring its potential to challenge Apple's long-standing dominance.
Despite Apple reclaiming the top spot, NVIDIA continues to be a formidable competitor and a legitimate threat to Apple's lead. With its AI chip technology proving indispensable across industries—from cloud computing to autonomous driving—the company's influence is only growing. Its leadership in AI innovation contrasts Apple's more consumer-centric technology portfolio, giving NVIDIA a unique edge in capturing new, high-growth markets.
3) Microsoft
Microsoft currently holds the position as the third most valuable company in the world, with a market capitalization approaching $3.108 trillion.
Its remarkable growth in 2024 saw Microsoft briefly surpass Apple and NVIDIA in January, temporarily ending Apple's long-standing dominance. This shift was largely due to fluctuations in stock price, which allowed Microsoft to regain the lead in a highly competitive tech landscape. Such stock price variations are driven by a range of factors, including investor confidence, company performance, and broader economic conditions.
Microsoft's resilience and steady income can be attributed to its diverse business portfolio, which spans cloud computing, enterprise software, and consumer technology. This diversification helps in maintaining its market value, as strength in one sector can offset potential underperformance in another. For example, Microsoft’s Azure cloud services and its growing AI capabilities have compensated for slower growth in traditional software sales.
The company's strategic investments in artificial intelligence, particularly its significant stake in OpenAI, have been transformative. Integrating AI models into its core products—such as Office 365 and Windows—has revitalized these offerings and positioned Microsoft as a leader in AI-enabled technology. Moreover, Microsoft’s strong relationship with Nvidia, a major buyer of its GPUs for Azure, highlights its focus on AI-driven growth. By leveraging Nvidia’s hardware and OpenAI’s AI models, Microsoft has ensured that its cloud services remain competitive in an evolving tech landscape.
4) Alphabet
Alphabet Inc. is positioned as the fourth largest company worldwide by market capitalization, boasting a market cap of $2.020 trillion.
Alphabet serves as the parent company to Google and other businesses. Google, well-known for its services like Search, Ads, Maps, and YouTube, remains its primary entity. Alphabet's portfolio also includes ad services, digital product sales, cloud services, and hardware like Nest and Waymo.
At the close of 2023, the company reported net revenues of $78.78 billion and managed to reduce expenses on technology equipment. The company is strategically focused on AI, emerging technologies, and diversifying revenue streams beyond advertising for sustained growth.
5) Amazon
Millions of merchants and consumers depend on Amazon's marketplace, making it the 5th most profitable company in the world with a market cap of $1.983 trillion.
Amazon's earnings growth has benefited from significant cost-cutting, optimization of fulfillment operations, and stabilized cloud spending. CEO Andy Jassy has tightened the company’s expenditures while expanding profitable services such as advertising, cloud computing, Prime memberships, and its third-party marketplace.
6) Saudi Aramco
As of October 21, 2024, Saudi Aramco's valuation maintained the $1 trillion mark with $1.743 trillion market cap, placing it among tech giants like Apple, Microsoft, Nvidia, Alphabet, Amazon.com, and Meta Platforms.
Earlier in February, Saudi Aramco briefly held the title of the world's most profitable company as its shares surged, reaching a market cap of SR9.24 trillion ($2.463 trillion). On May 7, 2024, Aramco reported a net income of $27.3 billion for the first quarter of 2024, down from $31.9 billion in Q1 2023.
In 2023, Saudi Aramco, the Saudi Arabian oil behemoth, achieved the highest global net revenue, earning profits exceeding $247 billion.
7) Meta
Meta currently ranks as the seventh most valuable company in the world, with a market capitalization hovering around $1.458 trillion. Despite the intense competition from other tech giants like Apple, Microsoft, and Nvidia, Meta has maintained a strong position through its focus on social media, advertising, and recent ventures into artificial intelligence and virtual reality. The company's core products, Facebook, Instagram, and WhatsApp, continue to be dominant platforms for global user engagement, contributing significantly to its revenue streams.
One of the driving forces behind Meta's recent growth has been its aggressive push into AI technologies and the metaverse. As outlined in its 2024 earnings reports, the company has been strategically investing in AI to improve ad targeting and user experience, while also focusing on its metaverse ambitions through the development of AR/VR technologies like the Meta Quest. These innovations have allowed Meta to capture new market opportunities, ensuring it remains competitive in the evolving tech landscape.
Meta's success is also fueled by its ability to leverage its massive user base for advertising, which continues to be its primary source of revenue. In its latest quarterly earnings report, Meta demonstrated strong ad revenue growth despite macroeconomic challenges. The company's focus on optimizing ad placement through AI and improving the overall performance of its advertising services has allowed it to further solidify its market share in the digital advertising space, outperforming some of its competitors in the sector.
8) TSMC
Taiwan Semiconductor Manufacturing Company (TSMC) made it to the list of the world's most valuable companies. This is largely due to a surge in market capitalization of $1.041 trillion market capitalization as of October 2024 from $902.23 billion last June. This is primarily driven by the high demand for AI chips.
After a significant rally, TSMC surpassed Broadcom Inc. in value. Analysts from Morgan Stanley and JPMorgan Chase & Co. predict further growth due to increasing AI-related revenue and strong pricing power. TSMC's recent gains offset weaker iPhone sales, with some brokerages raising their price targets by about 10 percent.
Many Wall Street brokerages have upgraded their price targets for TSMC, highlighting growing AI demand and potential price hikes by 2025. Goldman Sachs raised its target by 19%, expecting chip manufacturing prices to climb, while JPMorgan anticipates AI contributing to 35% of total sales by 2028. As a leader in advanced chip technology, TSMC has benefited significantly from its relationship with Nvidia Corp., making it a top choice for global investors.
9) Berkshire Hathaway
Berkshire Hathaway, led by the legendary investor Warren Buffett, currently holds the position as the 9th most valuable company in the world, with a market capitalization of around $1.002 trillion. The company is a diversified holding conglomerate with interests across multiple industries, including insurance, railroads, utilities, manufacturing, and financial services.
This broad portfolio enables Berkshire Hathaway to maintain steady profitability even during periods of economic uncertainty, which contributes to its high market valuation. Its conservative yet powerful investment strategy, focused on long-term gains and solid fundamentals, has made Berkshire a staple of value investing.
10) Broadcom
Right behind Berkshire Hathaway is Broadcom, ranked as the 10th most valuable company globally with a market capitalization close to $840.19 billion. Broadcom is a leading semiconductor and infrastructure software provider, with its products used in industries ranging from data centers to smartphones. The company’s leadership in producing high-performance chips, coupled with its strategic acquisitions, has positioned it at the heart of the technology sector’s rapid growth.
Broadcom’s continued expansion into the software market through high-profile acquisitions, such as its purchase of VMware, underscores its strategy of diversifying its revenue streams. This combination of semiconductor expertise and enterprise software solutions has helped Broadcom maintain its relevance and drive market value.