IT giants in the U.S., China and South Korea are posting a strong growth this year.
According to data compiled by Bloomberg as of May 28, the combined market cap of three companies – FAANG of the U.S., BAT of China and Samsung Electronics of South Korea – amounted to US$3.45 trillion (3857.75 trillion won), up US$831.4 billion (930.34 trillion won) from US$2.62 trillion (2927.42 trillion won) at the end of last year.
The figure is 2.5 times higher than US$1.4 trillion of South Korea’s gross domestic product (GDP) last year estimated by the International Monetary Fund (IMF).
Starting with Apple’s growth of nearly US$200 billion (223.8 trillion won), the market caps of Alphabet, the holding company of Google, Amazon and Facebook increased more than US$100 billion (111.9 trillion won) this year. The stock prices of Apple, Facebook, Amazon, and Netflix grew over 30 percent compared to earlier this year, while the figure of Google increased 24 percent.
The market cap of Tencent, the leading stock in Asia, also grew US$100 billion (111.9 trillion won) this year, while that of Alibaba and Samsung Electronics increased US$90 billion (100.71 trillion won) and US$60 billion (67.14 trillion won), respectively. The stock prices of Tencent and Alibaba also showed a 46.9 percent and 41.2 percent increase compared to earlier this year, surpassing FAANG. Samsung Electronics also saw its stock price increase 28 percent.
As IT giants increased its size, the rankings of global companies based on market cap changed. U.S. IT companies – Apple, Alphabet, Microsoft, Amazon and Facebook – ranked first to fifth on the global market cap list. Other U.S. companies, like ExxonMobil, JPMorgan Chase and GE, failed to make the top 10 list.
As Chinese IT giants, including Tencent and Alibaba, increased their size at a faster pace than U.S. IT giants, they made the top 10 list. Tencent took ninth place, while Alibaba 11th.
Samsung Electronics, the leading stock in South Korea which showed an unprecedented rally this year, is rapidly making advances in the global market cap rankings. The company ranked 39th in terms of market cap at the end of 2015 but went up from 26th place last year to 14th this year.
There are also concerns over the bubble as global IT companies are showing growth. This came after some said that hedge funds are tilting heavily towards Facebook, Amazon and Google. Bank of America's brokerage, Merrill Lynch, recently published a report that IT stocks will show the strongest year in 15 years when inflows into tech-focused mutual funds maintain the same pace, and that there are early signs of an overshoot.