The largest company in the world can fluctuate day to day, even minute by minute, depending what measurement is used. Tesla began 2022 as the world's fifth largest company by market cap and ended the year in 11th place after their CEO Elon Musk's acquisition of Twitter.

Author: Luca Ventura

Top 10 Largest Companies of 2020 by Market Capitalizationa

Rank Company Country Sector ($ Bil.)
1 Apple U.S. Technology 1,971
2 Saudi Aramco Saudi Arabia Energy 1,956
3 Amazon U.S. Consumer Services 1,592
4 Microsoft U.S. Technology 1,546
5 Alphabet U.S. Technology 1,116
6 Alibaba China Consumer Services 863
7 Facebook U.S. Technology 795
8 Tencent China Technology 724
9 Berkshire Hathaway U.S. Financial 496
10 Taiwan Semiconductor Taiwan Semiconductors 405
aAs of November 3, 2020.

Top 10 of the 2020 Fortune Global 500a

Rank Company Country     Revenues ($ Mil.) Revenues (% Change)           Profits ($ Mil.) Profits (% Change)
1 Walmart U.S. 523,960 1.9 14,880 123.1
2 Sinopec Group China 407,010 -1.8 6,793 16.2
3 State Grid China 383,910 -0.8 7,970 -2.5
4 China National Petroleum China 379,130 -3.5 4,443 95.7
5 Royal Dutch Shell Netherlands 352,110 -11.2 15,840 -32.2
6 Saudi Aramco Saudi Arabia 329,780 -7.3 88,211 -20.5
7 Volkswagen Germany 282,760 1.6 15,540 8.5
8 BP United Kingdom 282,620 -7.0 4,030 -57.1
9 Amazon U.S. 280,520 20.5 11,590 15.0
10 Toyota Motor Japan 275,290 1.0 19,096 12.4
aFiscal year ended on or before March 31, 2020.

Top 10 of the Forbes Global 2000a

Rank Company Country     Revenues ($ Bil.)          Profits ($ Bil.)          Assets ($ Bil.)     Market Value ($ Bil.)
1 ICBC China 177 45 4,323 242
2 China Construction Bank China 162 39 3,822 203
3 JPMorgan Chase U.S. 143 30 3,139 292
4 Berkshire Hathaway U.S. 255 81 818 455
5 Agricultural Bank of China China 149 31 3,698 147
6 Saudi Aramco Saudi Arabia 330 88 398 1,685
7 Ping An Insurance Group China 155 19 1,219 187
8 Bank of America U.S. 112 24 2,620 209
9 Apple U.S. 268 57 320 1,286
10 Bank of China China 135 27 3,387 113
aData as of April 30, 2020.

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.

For these top companies, 2021 turned out to be a very good year. It came after a very bad one: 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. However, aggregate sales rose to $37.8 trillion in 2021, an increase of 19% and the highest annual growth rate in the ranking’s history.  Walmart managed to reclaim the title of the world’s largest company by revenue for the ninth consecutive year, while Amazon landed at number 2, its highest position ever. The most important takeaway from that is this: for the first time, revenues from companies in Greater China (including, Fortune notes, Taiwan) exceeded revenues from U.S. companies on the list. Overall, they account for 31% of the total. Greater China also has the most companies on the list, 145, up two from last year. In the meantime, the US was up two as well, with 124, while Japan lost six to 47. Overall, the companies included in the survey encompass 229 cities and 33 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 only in the previous edition of the list, although it drops one spot to number 7 this year. Along with Amazon, it is the only big American tech company making the top 10. Alphabet is at number 17, Microsoft at 33 and Facebook is trailing at 71. Tesla (which according to some definitions is a tech company that makes cars) at 242, is squeezed between the petrochemical firm Shenghong Holding Group and the naval conglomerate China State Shipbuilding.

When ranking companies by revenue, technology stocks do not fare as well as when they are ranked by their market value. Behind Walmart and Amazon in Fortune’s top 10, making up the rest of the top five, we find Chinese energy corporations State Grid, China National Petroleum and Sinopec; Saudi Aramco is at number 6 (but first globally when it comes to profitability); carmaker Volkswagen is behind Apple at number 8; and the world’s largest construction firm China State Construction and Engineering and retail pharmacy chain CVS Health take the remaining two spots.

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? Certainly, the trifecta of Covid-19, inflation and war has made them less inclined to take risks, but it is a well-established axiom that tech companies can have much greater growth potential. 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 that—especially when the market sentiment is positive—frequently surround 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 20th 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.

Market turbulence, the report says, has pushed down the collective market capitalization of the 2,000 companies on the list by 4% to $76.5 trillion compared to last year, but all other metrics—as of April 22—were up. Their collective sales rose 20% to $47.8 trillion and their profits were up—way up: they doubled, to $5 trillion.

The survey also turned out results similar to the Fortune 500 list when it comes to energy companies: ExxonMobil, Shell and Chevron—which ranked in the 300s in last year’s survey—jumped to the number 15, 16 and 26 spots. Airlines, it is noted, experienced similar rebounds. The report also illustrates—despite the tailwinds currently facing the Chinese economy—the strength of its industries. China’s company count has climbed or has stayed the same each year since the ranking launched two decades ago, with a record 351 firms (including those from Hong Kong) making the list, up 1 from last year. Meanwhile, up by 5, the US still prevails in terms of the number of enterprises listed, boasting a total of 595 firms. Japan (195), South Korea (65), Canada (58), the United Kingdom (57),  India (55) France (54), Hong Kong individually (54) and Germany (52) make up the rest of the top 10.

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, Berkshire Hathaway with a positive track record spanning over six decades and assets of almost $1,000 billion? Like beauty, size is in the eye of the beholder.