Apple (AAPL), Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGLE) Combined Market Cap Is Now Equal to 42% of Nasdaq 100 (NDX)

by Usman Salis

Tech giants continue their expansion into the Nasdaq 100 Index, and six companies altogether account for almost 50% of the capitalization.

Tech stocks have always been strong in the index, but in 2020 this imbalance has reached unprecedented proportions.

According to Jeroen Blokland, the head of the Robeco multi-asset fund, only four technology companies now account for 42% of the Nasdaq 100’s capitalization. These companies are mastodons such as Apple, Amazon, Microsoft and Alphabet, the parent company of Google.

#Apple, #Microsoft, #Amazon and #Alphabet (#Google) make up 42% of the #NASDAQ 100 Index!Jeroen Blokland via Twitter

Image Source: Twitter @jsblokland
Image Source: Twitter @jsblokland

50% of the Index Capitalization for 6 Companies? Easy

Other companies worth mentioning are Facebook and Tesla. However, they total only 6% of the index capitalization, which is less than any of the four giants. However, in total, all 6 companies make up 49% of the Nasdaq 100’s capitalization, the same as the other 94 companies represented in the index.

The correction dealt serious blows to the capitalizations of the giants. Thus, Amazon lost about 10% from the highs of early September. Apple and Alphabet both declined more, shedding 15% of all-time highs. Microsoft shares were the most resilient, falling “only” by 9%.

Image Source: Google Finance AAPL
Image Source: Google Finance AAPL

Recent History of Mighty Techs

Recall that at the end of August, when the split between Tesla and Apple shares took place, their shares, with the support of Amazon, managed to raise the Nasdaq 100 by 1%. Even more remarkable is the fact that the other 97 companies were on the contrary falling at this time, but this could not prevent the pressure of the three tech giants.

Despite the ongoing correction, which turned out to be the most rapid in recent years, historical data shows that this can lead to large gains, as almost all fast corrections led to a rapid increase over the next 6 months, according to the historical data.