The coronavirus crisis resulted in a consistent shift in the business sector, with a couple of giant corporations exerting significant influence on stocks since the technology explosion. After the COVID-19 pandemic and economic slump, big companies such as Apple, Amazon, and Microsoft will be in a favorable position. Did you know that the demand for shares of these corporations has increased amid the corona crisis?
According to an article published on https://www.nytimes.com, though analysts have cut back on the expectations for the three giants’ quarterly incomes, the stock values of Amazon, Microsoft, and Apple are shooting up even at this crisis times. Read on to learn more.
The combined value increases manifold
The combined value of the shares of these companies giant increased over three-quarters of a trillion dollars, which is greater than the collective gain of the base half of all stocks if you go by the S&P 500. When it comes to investors, they are waging that the corona pandemic is speeding up the already mounting influence of USA’s corporate houses.
These companies have flexible business models, as most of their activities are online. It has been seen that Amazon is one of the most accomplished companies in America and the online giant is still processing orders amid the COVID-19 crisis that shook the entire world.
Amazon, Apple, and Microsoft have huge cash reserves
Apart from the fact that the three companies are huge, they are also benefiting amid the corona pandemic because they have loads of cash that makes them immune to problems like fund scarcity like the other US companies are facing now. To be candid, Apple, Microsoft, and Amazon are sitting on wads of currency notes.
The investors cite that the stronger, powerful, stable, and larger balance sheet firms will win compared to their smaller peers.
Top stocks in the S&P 500
Based on the findings of the Goldman Sachs, the top-performing stocks in the S&P 500 contributed to approximately 27 percent of the entire worth of the index. The top five corporations are Apple, Microsoft, Alphabet, Facebook, and Amazon – all contributing to 20 percent of the index.
The concentration of wealth in the top companies
It is indeed true that the concentration of market capital in the top companies has reached the peak, of late. Then, it has been a long-term trend observed in the last couple of years, revealing, in part, transformation in the corporate US structure. The corona crisis and since the great recession of 2008, the financial crunch has been discernible by an amplification of the consolidation giant of a few industries including airlines and banking. The larger corporations have grown at a steady pace, as well as snagged a bigger share of the proceeds.
Several investors expect that the bigger companies will expand more after the corona pandemic, while smaller businesses will experience the hardest hit. The smaller firms will have increased debts, thus making them giant more vulnerable amid the epidemic outbreak and lockdown.
So we see that the big players are not affected by the pandemic, while the smaller firms are striving hard to survive. Measures need to be implemented giant to make small businesses bounce back to normal after the pandemic has gone for good.