$3.4T outflows market capitalisation of five largest U.S. companies in 2022

The prevailing macroeconomic factors have affected equities, forcing investors to adopt a cautious approach before participating in the market. The situation has led leading companies to record significant capital wipeout in 2022.

In particular, data acquired by Finbold on November 3 indicates that the cumulative market capitalisation of five leading companies in the United States has recorded outflows of $3.41 trillion, or a drop of 33.8% in 2022. Notably, at the start of the year, the companies had a total market cap of $10.09 trillion, dropping to $6.68 trillion as of November 3.

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A breakdown of the firms indicates that Apple (NASDAQ: AAPL), the largest company by valuation, began the year with a market cap of $2.9 trillion before dropping 18.33% to $2.3 trillion as the electronic giant registered the smallest drop in valuation among the selected companies. Microsoft’s (NASDAQ: MSFT) capitalisation dropped by 34.56% from $2.5 trillion to $1.64 trillion. Elsewhere, Alphabet’s (NASDAQ: GOOG) valuation has plunged from $1.9 trillion to $1.1 trillion or 39.82%.

Electric vehicle giant Tesla’s (NASDAQ: TSLA) current valuation of $0.66 trillion represents a drop of 38.97% from the $1.06 trillion recorded at the start of the year. Lastly, e-commerce firm Amazon (NASDAQ: AMZN) recorded the biggest drop year-to-date in valuation by 44.74% from $1.69 trillion to $0.939 trillion.

Implications of drop in valuation

The report overviewed the implication of the drop in valuation, considering that the companies have enjoyed massive success over the years. According to the research report:

“Notably, a section of the market believes that the current valuation of the tech stock should not be a cause for alarm. There is a general argument that the stocks have enjoyed an abnormally stretched valuation and strong outperformance compared to other sectors.”

With market capitalisation acting as a key metric for the companies, the firms need to act and ensure capital outflows are minimised. However, it will depend on the general market response to the economic situation.