When talking about ‘the largest company in the world’, Top 5 Largest Companies in The World this usually refers to the market capitalization (market cap). This is the value of the outstanding shares of a listed company. In other words, the number of outstanding shares multiplied by the current market price per share. To give you an indication, all of the top five companies have had a market capitalization above $ 1 trillion at some point in the first two months of 2021.

Fun fact: the companies in positions 2 to 5 on this list all started in a garage.

1. Saudi Aramco

Saudi Aramco

The Saudi Arabian oil company, Saudi Aramco, is currently the largest company in the world by market capitalization with a valuation of 6.60 trillion SAR (€ 1.62 trillion [1] ). This oil and gas company is headquartered in Dhahran, Saudi Arabia.

The origins of this company date back to 1930 when a concession agreement between Saudi Arabia and the Standard Oil Company of California (SOCAL) was signed. To manage the agreement, a subsidiary called California Arabian Standard Oil Company (CASOC) was established. Later in the 1980s this became the Saudi Arabian Oil Company. After years of searching and digging, they found oil in the Saudi deserts. After that, the company grew rapidly. In 1949, about 500,000 barrels of oil were produced per day.

Saudi Aramco made headlines last year when its initial public offering (IPO) on December 11 set the record as the largest IPO ever. Before the IPO, the company was wholly owned by the Saudi Arabian government. There was a lot of discussion on which stock exchange the company would list first. Ultimately, the choice was made for the Saudi Arabian stock exchange, the Tadawul. On the second day of trading, stock prices rose 10% and the valuation crossed the $ 2 trillion mark.

To put the size of Saudi Aramco into perspective, its current market capitalization is greater than that of Exxon Mobil (€ 210.79 billion), Royal Dutch Shell (€ 166.77 billion) and Chevron (€ 173.98 billion) combined. Unfortunately, it is not possible to invest on the Tadawul, where Saudi Aramco is listed, via DEGIRO. Therefore, it is not possible to buy Saudi Aramco shares through DEGIRO.

2. Microsoft

Microsoft

Microsoft ranks second with a market capitalization of $ 1.28 trillion (€ 1.18 trillion). Famous for its Windows software and OfficeSuite, this company has grown into the largest technology company. Friends Bill Gates and Paul Allen founded the company in 1975 after both graduated from college. They started developing and selling a BASIC interpreter (programming language) for the Altair 8800. This is a microcomputer made by the American electronics company MITS. Microsoft continued to grow and eventually went public in 1986. With this IPO, it raised $ 61 million (€ 56.07 million).

Today the company is divided into three segments: Productivity & Business, Intelligent Cloud and Personal Computing. Within these segments, Microsoft owns, for example, operating systems, cloud computing services, business solution applications, computers, tablets, game consoles, telephones and video games.

Microsoft skipped many computer trends in the early 2000s and relied on their operating system called Windows as a major source of revenue. Under the leadership of CEO Satya Nadella, the company began to commit to the cloud computing business. Their service Azure in particular received a lot of time and attention, although in this market it was years behind competitor Amazon.

Over time, Microsoft’s cloud computing services have become an important source of revenue for the company. Azure is not the only service in Microsoft’s Intelligent Cloud segment, combined with the other services, this entire segment accounted for 32% of total revenue in the past quarter.

In addition to its own brands, Microsoft has also added other companies to its portfolio over the years. The largest acquisition was LinkedIn. Microsoft bought the company in December 2016 for $ 26.2 billion (€ 24.08 billion ). Some other examples are Hotmail, Skype, GitHub and Minecraft.

You can invest in Microsoft (ISIN code US5949181045) through the NASDAQ, Xetra, Börse Frankfurt and SIX Swiss Exchange.

3. Apple

Not far behind Microsoft is Apple, with a market capitalization of $ 1.26 trillion (€ 1.16 trillion [2] ). The company was founded in 1976 by Steve Jobs and Steve Wozniak in California, the United States. The third founder, named Ronald Wayne, soon left the company and sold his stock for $ 800 at the time, a decision he may now regret.

Apple’s first product was the Apple I, a computer without a keyboard and monitor. Even before Apple released the first Macintosh computer, the company was listed on the stock exchange. This IPO took place in December 1980. This raised just over $ 100 million (€ 91.93 million  ). It wasn’t until the early 2000s that Apple launched the now widely known iMac and iPod. Finally, the iPhone debuted in 2007.

Today the business consists of the following segments: iPhone, Mac, iPad, Wearables Home & Accessories and Services. Historically, iPhone sales have accounted for more than half of Apple’s revenues. However, for the first time in seven years, this turned out not to be the case when presenting the 2019 half-year figures: only 48.29% of Apple’s revenues came from iPhones. However, the company has embraced this change and is diversifying its revenue streams with products such as AirPods, Apple Card and Apple TV +.

Apple’s ISIN code is US0378331005, shares are traded on the NASDAQ, Xetra, London Stock Exchange, Börse Frankfurt and SIX Swiss Exchange.

4. Amazon

A market capitalization of $ 982.05 billion (€ 902.41 billion ) makes Amazon the fourth most valuable company in the world. Amazon was founded in 1994 by Jeff Bezos. Initially it was an online bookstore. In May 1997 the company went public. This raised $ 54 million (€ 49.62 million ). A year later, Amazon added additional product categories to its offering. The company saw rapid growth. In 1999, a total of 20 million items were shipped to 150 countries.

Amazon is one of the largest online retailers today and also offers a number of other products and services, including cloud computing services called Amazon Web Services (AWS). AWS is a major player in the cloud market, especially in the IaaS sector. Gartner released an article in 2018 indicating that AWS is responsible for 47.8% of IaaS’s global market share.

Amazon can be traded on the NASDAQ, Xetra, Börse Frankfurt and Borsa Italiana under the ISIN code US0231351067.

5. Alphabet

Alphabet first joined the “$1 trillion club” briefly in January 2020 and, with a market capitalization of $ 953.57 billion (€ 876.24 billion ), is the fifth largest company in the world. Before 2015, Alphabet was known as Google, however, the company decided to reorganize under a new parent company. In 1995, Google founders Larry Page and Sergey Brin met at Stanford University, where they started working on a search engine called Backrub. Later this got the now known name Google. Nine years later, Google launched its IPO with a valuation of $ 23 billion (€ 21.13 billion ).

Alphabet divides its financial reports into two categories: Google and ‘Other Bets’. Companies and products that fall under the Google category are Google subsidiaries such as Google Ads, Google Cloud, Chrome, YouTube and Android. Other Bets includes companies such as Calico, Verily, Waymo, X and CapitalG. The vast majority of the revenue comes from the Google category. Only 0.4% of the revenues in the fourth quarter of 2019 came from the second category.

Alphabet is traded on NASDAQ under the two tickers GOOG and GOOGL. Shares traded under the ticker GOOGL are categorized as Class A. GOOG shares are categorized as Class C. The main difference between the two is voting rights.

 

Investing through DEGIRO

Do you want to invest in one of the largest companies in the world? As indicated, it is not possible to invest in Saudi Aramco through DEGIRO. However, investing in Microsoft, Apple, Amazon and Alphabet is possible. We offer investing in the US markets for € 0.50 + USD 0.004 per share. The rates for other grants mentioned differ per grant. View our rates overview here for current rates.

The information in this article is not written for advisory purposes, nor is it intended to recommend investments. Investing involves risks. You can lose (part of) your investment. We advise you to only invest in financial instruments that match your knowledge and experience.