A snapshot of the largest companies at a given time tells us what the market values most. In 2016, the world’s biggest companies by market cap are global technology firms Apple, Alphabet (Google), Microsoft, Amazon and Facebook, according to Visual Capitalist.
Tech firms have the unique benefit of scale, which will keep them at the top of the list for some time. They can grow quickly without the risk faced by traditional firms, which require capital, need large workforces, or rely on store growth. Technology companies have supplanted global oil and gas firms (which have lost value because of the weak oil price) as well as large American firms like GE and Walmart.
But the list can be deceiving. Assessing the companies by a different measure (such as revenue) will yield a totally different list.
For example, three Chinese banks are at the top of the Forbes 2016 list of the world’s largest companies, followed by Warren Buffett’s Berkshire Hathaway. Forbes measures revenue, profits and assets as well as market value to come up with a ranking.