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The dethroning of Big Tech ?

Jul 02, 2024

The ten largest US companies, predominantly Big Tech, now constitute nearly one-third of the US equities market capitalization—a concentration of market power previously unseen. Big Tech’s dominance is supported by substantial competitive moats, including network effects, data acquisition advantages, advanced technical capabilities, strong balance sheets to fund new ventures, and the ability to acquire and integrate small, innovative businesses.

Historically, there have always been market leaders across various sectors such as railroads, chemicals, automobiles, oil, and telecommunications. However, as analysts from Bridgewater highlight in a recent study: “Over the subsequent decade or two, about half of the market champions underperform the market and fall out of the top 15 champions group. And over long periods of time, almost all champions are dethroned.”

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