The Magnificent 6: These Stocks Are Gobbling Up Market Share
Ed Yardeni | Jul 12, 2020 01:01AM ET
The S&P 500 stock price index includes 500 companies. On Friday, five of the six so-called FAANGM stocks (all but Netflix (NASDAQ:NFLX)) occupied the top spots as the largest S&P 500 companies by market capitalization. They were: Apple (NASDAQ:AAPL) ($1,578 billion), Microsoft (NASDAQ:MSFT) ($1,564 billion), Amazon (NASDAQ:AMZN) ($1,442 billion), Alphabet (NASDAQ:GOOGL) ($1,002 billion), and Facebook (NASDAQ:FB) ($665 billion). Netflix ($210 billion) was the 20th largest company in the S&P 500. Collectively, their record-high $6.5 trillion market cap accounted for a record 25% of the S&P 500’s market cap on July 3 (Fig. 14 ). That’s a decline of 1.8% per year on average. An amount of share-count decline that small is not a big contributor to their earnings-per-share (EPS) growth rate, which suggests that much of their stock buybacks have been motivated by reducing EPS dilution from shares awarded to employees through compensation plans.
(8) Seven would be even more magnificent. There are other magnificent stocks that we could add to the FAANGMs. Nvidia (NASDAQ:NVDA) comes to mind. That would make it the Magnificent Seven, or “FAANNGM.” If Tesla (NASDAQ:TSLA) were to join the S&P 500, the Magnificent Eight could be “FAANNGMT.”
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