During the pandemic some of the largest companies in the world grew while others shrank. Global Finance compares two of the best-known rankings of company size with its own list of the world's Top 10 by market capitalization to provide a comprehensive picture of global corporate goliaths.

Author: Luca Ventura

Is Apple still ahead of the pack? Or did Microsoft or Amazon manage to pull it off? And what about Google and Facebook? These giants have been in a tight race for the title of the most valuable publicly traded company for quite some time. As of August 2, 2021, just days after they had reported second-quarter earnings, the winner was still Apple. The Cupertino powerhouse has dominated the list since 2020, when it also became the first American company to reach a market valuation of $2 trillion, and its valuation has only grown since then—to about $2.4 trillion. Will it hit the $3 trillion mark? Analysts and investors alike seem to believe so.

Yet, the stock value of a company can change quickly. Apple itself has experienced several setbacks. Microsoft briefly dethroned it as the most valuable enterprise in the world in 2018, Amazon beat both companies for the top slot in January 2019 but Microsoft took it back a month later. Then Apple regained the lead in October 2019, only to lose it to Microsoft in February of 2020. Microsoft's dominance did not last long. After releasing stellar earnings, Apple surged to the top of the ranking in June of last year, where it has stayed ever since. Fast forward to today, and we might see the tables starting to turn again. Apple’s most recent fiscal results were first-rate but perhaps not so stellar, Microsoft—which has just recently closed above $2 trillion in market cap for the first time—smashed expectations, hence so forth getting another shot at surpassing the archrival in the near or not too distant future.

But how can we make sense of all the ups and downs in the valuation of these two tech pioneers? For most of the past decade, Apple's stock price has been both the beneficiary and the victim of the company's phenomenal success. While sought-after products like iPhones, computers and tablets propelled Apple to new heights, whenever sales appeared to slow so did the company’s market capitalization. By contrast, Microsoft's business model has always been centered around steadily growing streams of recurring revenues. You might not need a new smartphone or laptop every year, but if you purchase a software license, a cloud package or a videogame subscription, you will likely buy one again in the future.

Eventually, Apple started borrowing from Microsoft's playbook: it launched news and games subscriptions, a video streaming service, and even its own credit card. Once Apple moved beyond hardware to software and services, its revenue growth became unstoppable.

To be clear: companies of all shapes and sizes can play the steady and predictable stream of revenue game. Amazon, Google and Facebook are certainly among them. Today they are all $1 trillion-plus companies, and along with Apple and Microsoft, these` top 5 US firms make up for roughly 20% of the S&P 500 index's entire market value.

Successful strategy (and product, and timing, and management) aside, the total dollar value of a company’s outstanding shares can be affected by a myriad of other unpredictable factors such as pandemics and politics. It was not too long ago when a controversial tweet by former US President Donald Trump could send stocks spiraling downward. Today’s stock market's biggest bogeyman is the risk of higher inflation. The pandemic too, of course, is not yet behind us: the so-called stay-at-home stocks that gained in value amid shutdowns and remote working last year dropped when vaccines became available; at the same time, airlines, hotels and other stocks that could benefit from the reopening of the global economy surged. When fears that the Delta variant could derail the recovery, they nosedived again.

While most of the world’s highest-valued companies are American, a few exceptions prove the point: Chinese technology firm Tencent and microchip maker Taiwan Semiconductor vaulted into the top 10 only in recent years (Alibaba, which just a year ago boasted a bigger valuation than Facebook, has slipped to 11th position after becoming the target of an antitrust investigation by the Chinese authorities). Their rise marked a shift not just in the geographical composition of the list, but a sectoral one as well. Until a decade ago, the most capitalized enterprises on the stock market were traditional long-standing blue-chip behemoths like Exxon, General Electric and AT&T. Today it is almost all tech companies.

Focusing too closely on ever-changing share prices, investor sentiment and political events rather than on underlying fundamentals can be misleading. Even in these tumultuous times, many publicly traded companies are not dramatically different in terms of market share, cash flow or employee headcount than they were a year ago. It stands to reason that their growth prospects might have changed in relation to the current circumstances—but those too, as we know, can both evolve or evaporate relatively quickly.

This is why Fortune's annual Global 500 list ranks the world’s top corporations by revenue instead of market capitalization to determine which is truly the largest. Published every year since 1995, the Global 500 list provides a bird's-eye view of the most important long-term trends in global markets.

After reaching a record high of $33.3 trillion in 2019, in 2020 total revenue for the top 500 firms fell 4.8% to $31.7 trillion, the most since 2016. The culprit, needless to say, was Covid-19. Aggregate profits were down too—by 20%, the biggest decline since 2009. Still, Walmart managed to reclaim the title of the world’s largest company by revenue—for the eighth consecutive year. However, this is perhaps the most important takeaway: China had the most companies on the list for the second year in a row, up eleven from 2019 to 135 (adding Taiwan, the magazine says, the total for Greater China is 143). The US was up just one with 122, while Japan held steady with 53. Overall, the companies included in the survey encompass 220 cities and 31 countries.

Where does Apple, the most capitalized company in the world, stand in Fortune's ranking? The company actually made it into the top 10 for the first time this year, up 6 positions to number 6. Only one other of the five big tech companies, Amazon, makes the top 10 at number 3. Alphabet is at number 21, Microsoft at 33 and Facebook is trailing at 86, squeezed between Chinese state-owned automobile manufacturer Dongfeng Motor and Dutch grocery retail company group Royal Ahold Delhaize.

When ranking companies by revenue, technology stocks do not fare as well as when they are ranked by their market value. Behind Walmart in Fortune’s top 10 we find Chinese energy corporations State Grid, China National Petroleum and Sinopec (respectively in second, fourth and fifth place), retail pharmacy chain CVS Health and healthcare and insurance company UnitedHealth Group (both new entries, in seventh and eighth place), and Toyota (9) and Volkswagen (10).

Why, then, do stock investors often prefer to pour money into tech companies and startups if they generate less revenue than car, energy or pharmaceutical firms? Because tech companies have much greater potential for growth. A person who bought $100 in Amazon shares during the firm’s 1997 IPO, today would own stocks worth about $170,000.

That also explains the success and interest frequently surrounding companies with tiny, non-existent or even negative profits. Their shareholders hope that these companies will be “the next Amazon,” a business that recorded its first annual profit in 2003, six years after its IPO. Jeff Bezos has long maintained that investing in future profitability through new products and services takes priority over hitting earnings estimates, a strategy that paid off handsomely.

In other words, there is no simple way to fully ascertain the size, influence and outlook of a company in relation to another at any given moment.

That is not to say that is not worth trying. To that end, the Forbes Global 2000 list—this year at its 19th annual edition—uses a multi-dimensional approach. It ranks the world's largest companies by using a composite score achieved by weighing revenues, profits, assets and market value equally.

Covid-19, the report says, has affected every company on the list—even so, the situation proved ultimately to be not all bad. Indeed, although sales and profits were down, total assets and market value were up—way up. By spring, when Forbes published its ranking, the 2,000 companies on the list had seen their revenues slipping 6% to $39.8 trillion and their profits falling 24% to $2.5 trillion. Their market capitalization, however, surged 47% to $79.8 trillion and their cumulative asset value rose by 11% to $223 trillion.

The survey also turned out results similar to the Fortune 500 list when it comes to Chinese companies: they are rising. China’s company count has climbed or has stayed the same each year since the ranking launched two decades ago, with a record 350 firms (including those from Hong Kong) making the list, up 26 from last year. Meanwhile, while it added only two companies, the US still prevails in terms of the number of enterprises listed, boasting a total of 590 firms. Japan (217), the United Kingdom (77), Canada (61), South Korea (58), France (57), Germany (51), India (50) and Taiwan (43) make up the rest of the top 10 countries with the most entrants in the ranking.

In conclusion, while it is fairly easy—based on economic, technical and organizational criteria—to tell a large company from a small company, things get more complicated when trying to choose among global behemoths which one is the largest. Is it Apple with its giant market capitalization, Walmart with over 10,000 stores in 24 countries, ICBC with its 200 million customers and assets of almost $5,000 billion, or Facebook with its 3 billion users? Like beauty, size is in the eye of the beholder.

Top 10 Largest Companies by Market Capitalization*

Rank Company Country/Territory Sector ($ Bil.)
1 Apple U.S. Technology 2,406
2 Microsoft U.S. Technology 2,140
3 Saudi Aramco Saudi Arabia Energy 1,865
4 Alphabet U.S. Technology 1,806
5 Amazon U.S. Technology 1,680
6 Facebook U.S. Consumer Services 992
7 Tesla U.S. Automotive 703
8 Bekshire Hathaway U.S. Financial 636
9 Taiwan Semiconductor Taiwan Semiconductors 606
10 Tencent China Technology 592
*As of August 3, 2021.

Top 10 of the Fortune Global 500*

Rank Company Country     Revenues ($ Mil.) Revenues (% Change)           Profits ($ Mil.) Profits (% Change)
1 Walmart U.S. 559,151 6.7 13,510 -9.2
2 State Grid China 386,618 0.7 5,580 -30
3 Amazon U.S. 386,064 37.6 21,331 84.1
4 China National Petroleum China 283,958 -25.1 4,575 3
5 Sinopec Group China 283,728 -30.3 6,205 -8.7
6 Apple U.S. 274,515 5.5 57,411 3.9
7 CVC Health U.S. 268,706 4.6 7,179 8.2
8 United Health Group U.S. 257,141 6.2 15,403 11.3
9 Toyota Motor U.S. 256,722 -6.5 21,180 13.1
10 Volkswagen Germany 253,965 -10.2 10,103 -35
*Fiscal year ended on or before March 31, 2021.

Top 10 of the Forbes Global 2000*

Rank Company Country     Revenues ($ Bil.)          Profits ($ Bil.)          Assets ($ Bil.)     Market Value ($ Bil.)
1 ICBC China 191 46 4,915 250
2 JPMorgan Chase China 136 40 3,689 465
3 Berkshire Hathaway U.S. 246 43 874 624
4 China Construction Bank China 174 39 4,302 210
5 Saudi Aramco Saudi Arabia 230 49 510 1,897
6 Apple U.S. 294 64 354 2,252
7 Bank of America U.S. 99 18 2,832 336
8 Ping An Insurance Group China 169 21 1,454 211
9 Agricultural Bank of China China 154 31 4,160 140
10 Amazon U.S. 386 21 321 1,712
*Data as of early April 16, 2021.