Global Top 100 companies - April 2024

Key highlights 2024

The Top 100 Companies hit a new high of $39,871bn as the global macroeconomic picture stabilises and equity markets rebound.

• The market capitalisation of the Top 100 companies increased by 27% ($8,438bn) compared to 31 March 2023, more than recouping prior period losses ($3,603bn).
• This new high of $39,871bn means that the Top100 companies have almost doubled in the past five years, producing a CAGR of 14% over that period.

Performance amongst the Magnificent Seven begins to diverge - will seven become five as the AI boom gathers pace?

• The Magnificent Seven accounted for 54% of the growth in the Top 100 this year. However, a stellar performance wasn’t the case across all of the seven.
• GRANOLAS, a more diverse, cyclical collection of European listed stocks, outperformed the Magnificent Seven in the prior year. However, the AI weighting of the Magnificent Seven trumped the GRANOLAS in the past year.

The largest four sectors (Tech, Consumer Discretionary, Communication Services and Financials), all grew in excess of 25% in the year, outperforming their benchmarks.

• The AI story drove Top 100 companies within the Technology sector to a 50% increase, outperforming the wider Technology Index by 10ppts.
• The best performing sector against its relevant benchmark was Consumer Discretionary, which outperformed the benchmark index by almost 100% (35% v 18%) – albeit this was also heavily linked to the AI theme given it was largely attributable to a US tech-based E-commerce business demonstrating it’s AI and cloud computing prowess.
  

Best of the rest: Whilst AI drove the majority of the growth in valuations this year, other sectors presented interesting stories too.

• Despite a modest year for most Health Care stocks, one US and one Danish Health Care company spurred the sector on thanks to soaring demand for their weight loss drugs, each up 126% and 60%, respectively.
  
• Consumer sentiment appears to be moving in favour of hybrid cars over pure electric, resulting in a Japanese automotive company having a strong year, up 76%, whilst a US based pure EV automotive company performed at the opposite end of the spectrum, down 15%.

^{Source: S&P Global Market Intelligence LLC with PwC analysis}

The growth of the Magnificent Seven has resulted in the aggregate value of the Top 100 becoming even more concentrated

^{Source: S&P Global Market Intelligence LLC with PwC analysis}

Magnificent Seven | Here to stay?

• The performance of seven particular stocks, dubbed the “Magnificent Seven”, over the last five years has resulted in increased concentration of the Top 100 aggregate value, with these seven companies now comprising 34% of the Top 100. This is similar to the proportion these seven stocks now comprise of the S&P 500 (29%).
• Over the last five years, the Magnificent Seven accounted for 47% of growth in the Top 100, achieving a 23% CAGR.
• The Magnificent Seven have however experienced mixed fortunes this year, as two of the seven, a US based technology products company and automotive company lagged behind as neither are yet considered to be major beneficiaries of AI.
• The remaining five, buoyed by the bullish sentiment for AI, all recorded significant double, or triple, digit gains. With the AI boom expected to continue, will seven become five?

Are the GRANOLAS Europe's answer to the Magnificent Seven?

• The GRANOLAS (9 of which are in the Top 100) are more diverse than the tech-centric Magnificent Seven, consisting of Health Care, Consumer and Technology businesses, grew 13.4% in the year.
• In 2023, GRANOLAS outperformed the Magnificent Seven, proving more resilient in times of significant macroeconomic uncertainty. However, only six recorded a year-on-year (YoY) increase this year.
• A Danish Health Care company continued to be Europe’s showstopper, up 60% YoY driven by the success of its weight-loss supplement, significantly outperforming other Health Care GRANOLAS.
  

The US remains dominant with an ever-growing proportion of the Top 100

^{Source: S&P Global Market Intelligence LLC with PwC analysis}

• US equities, up 36%, were buoyed by the AI boom, however there were notable increases in the Health Care (+7%) and Financials Sectors (+11%). The US is the only region where its constituents have delivered a double digit 10-year CAGR.
• Europe saw a 14% increase in valuation. Health Care and Consumer were the dominant sectors, each of which represent approximately a quarter of Europe’s aggregate market capitalisation.
  
• China and its regions saw the only decline in valuation, at -5% YoY, as the region’s economic headwinds negatively impacted investor sentiment. The region lost two spots, leaving it with an overall composition of ten companies. A Taiwanese Semiconductor Manufacturer was a shining light for the region, entering the top 10 for the first time with growth of 39% YoY.
  
• The Rest of the World’s valuation was spurred on by significant increases for the three largest stocks, a Saudi Arabian Oil Company, a Japanese automotive company and a South Korean technology company, which increased 5% ($99bn), 25% ($81bn) and 76% ($146bn) YoY, respectively. The latter was buoyed by strong demand for hybrid vehicles in the last year.
  

The largest four sectors all grew in excess of 25% in the year, outperforming their relevant industry benchmarks

^{Source: S&P Global Market Intelligence LLC with PwC analysis}

• The Technology sector saw a significant $4.3tn (50%) increase in valuation in the year, outperforming the technology benchmark by 10ppts.
• The Consumer Discretionary sector outperformed its relative index by 17ppts, driven by a US tech-based e-commerce company recording a 77% valuation increase in the year.
• The Communication Services sector finished 35% up, outperforming its relative benchmark by 5ppts, with two US based companies accounting for 92% of the sector's growth after demonstrating their AI capabilities to investors.
• Financials saw a 26% increase in market capitalisation, outperforming its index by 3ppts as a number of banks benefited from the higher interest rate environment.