Despite a stock market downturn in the final days of December, 2024 has been an exceptionally strong year for U.S. equities.
Nowhere is this fact as clear as in the technology sector, which, as Finbold research found using data from CompaniesMarketCap, saw its ten largest companies add an incredible $6.6 trillion to their collective market cap by press time on December 31: an average increase of 51.31% since the final day of 2023.
Apple (NASDAQ: AAPL), a long-time contender for the spot of the world’s most valuable company, took a decisive lead in 2024, with its market cap reaching a staggering $3.8 trillion at the time of publication.
Simultaneously, the semiconductor giant Nvidia (NASDAQ: NVDA) – itself the biggest company in the world at several points during the year – gained the most, as its valuation rocketed more than $2 trillion within just 12 months.
U.S. technology sector dominates with $6.6 trillion in inflows in 2024
While no company can quite match the size of Apple or replicate Nvidia’s 175.3% year-over-year (YoY) rise, the entire U.S. tech sector has shown notable strength in 2024 and recorded substantial growth.
Broadcom (NASDAQ: AVGO), though not as widely discussed as the world’s largest chipmaker, nonetheless rose significantly as its market capitalization stood at $461 billion at the end of 2023 and, at press time, grew to $1.1 trillion.
Alphabet (NASDAQ: GOOGL), despite the worsening quality of its search engine and the danger of losing its browser due to a Department of Justice (DoJ) intervention, likewise performed well.
Google’s valuation increased by a substantial $592 billion – 33.71% – from $1.7 trillion to $2.3 trillion.
Furthermore, both Meta Platforms (NASDAQ: META) and the electric vehicle (EV) maker Tesla Motors (NASDAQ: TSLA) saw their market capitalization rise back above $1 trillion in 2024, as the former grew 64.02% in 12 months, and the latter 69.52% within the same time frame.
Even the comparatively small technology firms, Oracle (NYSE: ORCL) and Salesforce (NYSE: CRM), performed admirably.
In the last 52 weeks, Oracle’s valuation rose 61.08% from just under $290 billion to nearly $467 billion, and Salesforce a non-trivial 26.14% from about $255 billion to just over $321 billion.
Was AI the biggest driver of technology sector growth in 2024?
A common theme among the most successful technology companies of 2024 has been their involvement with the artificial intelligence (AI) boom.
Indeed, the staggering growth that emerged from the developments in the sector was evident months ago when Finbold research found that the top 10 AI firms saw more than $5.4 trillion flood into their market cap between late 2022 – the release time of the first public version of ChatGPT – and June 5, 2024.
Still, the common argument that in the ongoing ‘gold’ rush – like in nearly every historical example – the ‘shovel sellers’ are doing far better than most prospectors appears true.
Microsoft (NASDAQ: MSFT), the big tech firm that arguably inaugurated the AI boom through its early and massive investments in OpenAI, is up by a comparatively modest 13.03% – $364 billion.
Nvidia, the company that has served as the big ‘shovel’ – microchip – supplier for the sector, rocketed over $2 trillion.
2025: a continued bull market or the year the bubble can burst?
Such stellar rise of the U.S.’ 10 biggest technology stocks, while exciting, has been giving cause for significant concern throughout 2024.
The performance of these companies did much to increase the gap between the most prominent large and mega-cap firms and the rest of the market while skewing the balance between actual revenue and share price.
Several prominent analysts and investors have been warning of similarities between the current state of the stock market and the situation seen during the Dot-com bubble, ahead of the Great Recession, and even the Great Depression.
The uncertainty arising from the apparently uncontrollable growth of big tech can be seen in the magnitude of corrections to adverse developments.
For example, the latest Federal Open Market Committee (FOMC) meeting ended up erasing $1.5 trillion in a day due to bringing a higher 2025 inflation forecast and a hint there will be fewer interest rate cuts in the new year.
Finally, though some uncertainty persists and there is room for caution, the outlook remains overwhelmingly bullish, with some industry leaders such as Nvidia estimated to grow to $4 trillion or even to $7 trillion in the coming 12 months.
Featured image via Shutterstock
