Goldman Sachs reveals that the FAAMG group (Facebook, Amazon, Apple, Microsoft and Alphabet / Google) represent 18% of the Standard & Poor 500 index.
The S&P 500 index was introduced in 1957 and follows the trend of the basket of shares formed by the 500 most capitalized American companies of the period. The FAAMG group formed by the companies mentioned above has reached a concentration which has not been observed since 2000:
The concentration of the index in the largest tech companies is the largest in the past 20 years, but a dot com-type drop is unlikely. The FAAMG collective, which includes Facebook, Amazon, Apple, Microsoft and Google, represents 18% of the S&P 500 index, a level never seen since 2000.
The concentration of the main technological values resembles that observed at the turn of the third millennium, when five large companies had oversized valuations before falling into a prolonged collapse.
The top five companies in 2000 – Microsoft, Cisco, General Electric, Intel and ExxonMobil – made up 18% of the index. The difference from this date is that the FAAMG group does not run any risk of medium-term collapse.
Indeed, according to analysts, the value of the shares of these companies will continue to remain stable or increase in the years to come. The data therefore confirm that Facebook, Amazon, Apple, Microsoft and Google dominate the uneven ranking of American companies with the highest capitalization.