Despite China’s rise, the US solidifies its hold on the world’s biggest company rankings

The United States is home to 16 of the 20 largest public businesses by market capitalization, one more than last year

An Apple store in Sydney (Australia) in a file image.
An Apple store in Sydney (Australia) in a file image.DAVID GRAY (REUTERS)
Ignacio Fariza

The United States is still unrivalled when it comes to big businesses. In 2022, only four of the 20 biggest public companies in the world by market capitalization were based elsewhere: Aramco, the Saudi oil giant is ranked second; Tencent, the Chinese telecommunications and technology company is ranked eleventh; Taiwanese semiconductor manufacturer TSMC is ranked fourteenth; and French luxury conglomerate LVMH is ranked fifteenth, the only European company to make the top 20 list. Despite heated debate about China’s ability to challenge American economic hegemony, the US managed to solidify its hold on the biggest company rankings by adding yet another company to the top 20.

Looking beyond the top 20, US dominance is equally overwhelming. According to Bloomberg, 23 out of the 30 most valuable companies in the world are American, as are 60 of the top 100. The nationalities of the companies in the top 100 are more varied: China has 11 companies, which is a good tally, but a mere one-sixth of the country it is trying to challenge. France and the United Kingdom have five each; tiny Switzerland has three companies; India, the Netherlands and Hong Kong have two each; and Germany, Japan, South Korea, Taiwan, Australia, Canada, Denmark, Ireland, Saudi Arabia and the United Arab Emirates have one each.

Tech companies remain strong

As in previous years, the strength of the US rests largely on the firepower of its technology companies, which remain strong despite an adverse economic environment and a precipitous stock market decline in 2022.

Apple lost more than a quarter of its market capitalization in 2022, but still held onto its top ranking with a comfortable lead over Aramco, the Saudi oil giant that is benefitting from Russia’s self-imposed withdrawal from the playing field. Saudi crude oil is more important than ever in the increasingly complex world energy market since the invasion of Ukraine. Next on the list are three more US tech titans – Microsoft, Alphabet and Amazon.

While the tech sector was heavily affected by the stock market decline, the impacts were widespread in 2022, the worst year for equities since the financial crisis of 2008. Virtually every company in the top 20 was affected, and the world’s 100 largest public companies lost a total of $7.2 trillion in market cap in just 52 weeks.

The energy and industrial sectors proved to be the most resilient by far, and even added a few new names to the top 100 list. Even though the push for decarbonization and the rise of alternative fuels such as green hydrogen may mark the beginning of the end for the oil sector, it still managed to place three very recognizable names in the top 20 – Aramco and two US companies, Exxon Mobil and Chevron. Aramco’s initial public offering (IPO) in late 2019, just a few months before the Covid-19 pandemic, was the last great debut on the world’s stock exchanges. There is no privately held business today that could launch an IPO and grab such a high ranking among the world’s largest public companies.

Stefan Rösch-Rütsche, managing partner of consulting firm EY in Switzerland, says, “The sharp rise in interest rates, inflation, the war in Ukraine, supply chain problems and rising energy prices have left their mark on global stock markets. Tech stocks that gained a lot of value during the pandemic are now suffering in a much more challenging economic environment.”

A different story in Europe

While the US shows no signs of faltering, Europe has lost the corporate luster it once had, and its decline has been rapid. Before the 2008 financial crisis, almost half (46) of the world’s 100 largest companies were based in Europe, including the UK. Today, there are only 15.

Led by China, booming economies in Asia account for 19 of the top 100 companies, four more than Europe. India, which will become the most populous nation on Earth in 2023, is home to several of the richest people in the world but has only two of the largest companies: multinational conglomerates, Reliance Industries and the Tata Group.

Unlike the mix of new and old US and Asian companies in the top 100, their European peers have one thing in common: tradition. Some of the LVMH group’s most iconic brands are more than a century old. Switzerland’s Nestlé, 23rd in the world and the second-largest Europe company, was founded in 1866. The third-largest European company, Danish pharmaceutical giant Novo Nordisk, was established in the 1920s. Roche, another pharmaceutical company, traces its origins to the late 19th century.

“Many European firms are in the midst of a profound transformation of their business models, and only a few of them are young companies,” notes Rösch-Rütsche, who says the picture is radically different on the other side of the Atlantic. Despite robust showings by long-established companies, many of the strongest businesses were created in recent decades. “The financial situation is significantly better in the US, and not only for young companies. While European capital markets are highly fragmented, there is a wider range of cheap and flexible sources of financing in the US.”

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