The Closest Market Cap Milestone Race Since the 1950s
The sequence broadly tracks the technological frontier of the US economy: demand for raw materials propelled US Steel over the $1 billion mark at the start of the 20th century; manufacturing pushed General Motors to $10 billion; computer hardware accounted for the next waypoint, with IBM’s market cap reaching $100 billion in 1987; and computer software took Microsoft to $500 billion before the dotcom bubble burst. It follows, then, that the contenders for the $1 trillion mark include the largest firms in internet services.
A review of the CRSP database on US-listed public securities shows that the market cap milestone race hasn’t been this close since the 1950s, when GM, Du Pont, AT&T and the Standard Oil Company of New Jersey were clustered closely around $10bn. In the race to $100bn and $500bn, IBM and Microsoft were well ahead of the next three largest companies.