Stock Market

Inside The Global 2000: JPMorgan Is Again The World’s Largest Company As Berkshire Hathaway Falls

Jamie Dimon’s too-big-to-fail JPMorgan regained its position on top of the list of the world’s largest companies, leading 611 U.S. firms. Chinese companies, led by its banks, represent 346 of the biggest.

By Hank Tucker and Andrea Murphy, Forbes Staff

With fears of a recession swirling, interest rates rising and the U.S. stock market well below 2022 highs, America’s preeminent bank has retaken its spot as the largest company on the planet.

JPMorgan Chase regained the No. 1 position on the Forbes Global 2000 list of the world’s largest companies for the first time since 2011, after Warren Buffett’s Berkshire Hathaway tumbled out of the top spot due to its investment portfolio’s decline. JPMorgan’s $180 billion in total revenue in the 12 months through March is up 44% from $125 billion on last year’s list, thanks largely to widening net interest margins. Deducting higher interest expenses gives JPMorgan $136 billion in net revenue during that span, 13% higher than the previous year.

U.S. Bank Upheaval

JPMorgan isn’t the only bank that’s grown in the last year. New York Community Bancorp and First Citizens BancShares both moved up several hundred spots after acquiring troubled Signature Bank and Silicon Valley Bank, respectively.

JPMorgan has had an eventful spring as a steady hand through the banking chaos that led to the failures of Silicon Valley Bank, Signature Bank and First Republic Bank. JPMorgan acquired First Republic on May 1, taking control of its $92 billion in deposits and $203 billion worth of loans and securities, and the bank reported a 2% year-over-year rise in deposits to $2.38 trillion at the end of the first quarter as nervous customers moved their cash from weaker regional banks.

“The U.S. economy continues to be on generally healthy footings—consumers are still spending and have strong balance sheets, and businesses are in good shape,” longtime CEO Jamie Dimon said in a press release announcing JPMorgan’s first quarter earnings. “However, the storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks.”

Gushing Oil Profits

The 104 oil and gas companies that have been on the Global 2000 for at least two straight years nearly doubled their cumulative 12-month net profit to $760 billion, with energy prices remaining elevated.

Every year since 2003, the Global 2000 has ranked the world’s publicly traded companies by sales, profit, assets and market value, with all four variables given equal weights. This year’s list accounts for the latest 12 months of data available through May 7. Altogether, the 2,000 companies on the list accounted for $50.8 trillion in sales, $4.4 trillion in profit, $231 trillion in assets and $74 trillion in market value, all down slightly from last year except for the record revenue figure. (Click here for the full methodology.)

Berkshire Hathaway fell from the top spot all the way to No. 338 due to its $22.8 billion net loss in the last 12 months. It posted a $43.8 billion loss in the second quarter alone last year due to slumps for its investment portfolio that includes large holdings of Apple, Bank of America and American Express. Berkshire is required to report these unrealized losses even if it continues to hold these stocks. The Oracle of Omaha prefers to highlight Berkshire’s operating profit, which remains positive, while its overall net profit swings with the stock market as a function of accounting rules. Its sales, assets and market cap still remain among the top 50 in the world, and it would likely return near the top of the list if its profit stabilizes with the market.

The United States is home to 611 of the companies on the Global 2000, up from 595 last year and ahead of China and Hong Kong’s 346 companies in second place. Japan is the only other country where more than 100 companies are based, with 192 firms on the list.

Global Imbalance

In the 20 years since the inaugural Global 2000, China and other Asian nations like South Korea have leapfrogged many Western European nations on the list.

The U.S. had 776 companies on the inaugural Global 2000 in 2003, but that number steadily declined to a low of 536 by 2012 as China and other emerging markets grew their presence. This is the first year with more than 600 American companies again since 2007, largely thanks to the U.S. stock market’s outperformance in the last decade. The top 100 U.S. companies on this year’s list have gained 64% in the last five years and 359% in the last 10 years in market value, while the top 100 international companies have risen just 8.7% over five years and a total of 47% in the last 10 years.

U.S. Stock Supremacy

Although many countries around the world have adopted market-based economies and privatization, the top 100 U.S. stocks on the list have performed significantly better than the largest international stocks for the last decade.

The highest-ranked newcomer is Houston-based Corebridge Financial at No. 345. Corebridge offers life insurance and retirement products and spun off from American International Group last September, raising $1.7 billion in America’s largest IPO of 2022.

Notable Newcomers

It was a subdued year for IPOs, but newcomers to the list include Life Insurance Corp. of India, the country’s largest IPO ever, and self-driving tech firm Mobileye.

The Global 2000 looks far different from the list’s first installment 20 years ago, when Citigroup was No. 1 and AIG, Fannie Mae and IBM were among the 10 largest companies in America. None are in the top 20 today, and Fannie Mae was delisted from the New York Stock Exchange in 2010 following the mortgage crisis and the Great Recession. Apple was just No. 963 in the world in 2003, with a $6.6 billion market cap that has since grown by a factor of more than 400 to $2.8 trillion.

Amazon was even lower at No. 1,178 in 2003 while it was still recovering from a severe crash during the dotcom bust. It climbed to a peak of No. 6 in 2022 but slid to No. 36 this year due to cratering profits. It posted $4.3 billion in net income in the last four quarters through March, down from $33 billion in the 2021 calendar year, with growth in its cloud computing business slowing. So far in 2023 it also laid off 27,000 of its 1.5 million employees. Amazon’s stock sank almost 50% in 2022, though it has recouped some of those losses with a 46% rebound this year.

Apple’s Rank Over The Years

Apple was barely in the top 1,000 on the first Global 2000 in 2003, but rose fast after introducing revolutionary products like the iPhone.

“In my opinion, few folks appreciate how much new cloud business will happen over the next several years from the pending deluge of machine learning that’s coming,” CEO Andy Jassy said on Amazon’s first-quarter earnings call. “The product innovation and delivery is rapid and compelling, and people sometimes forget that 90-plus percent of global IT spend is still on-premises. If you believe that equation is going to flip, which we do, it’s going to move to the cloud.”

With Amazon and Berkshire Hathaway falling in Forbes Global 2000 rankings, UnitedHealth Group, Wells Fargo, Chevron and Verizon Communications make up the rest of the 10 largest American companies. The U.S. top 10 generated $2.4 trillion in 12-month sales and $447 billion in profit, with $11.2 trillion in assets and $8.5 trillion in market value.


MORE FROM FORBESGlobal 2000 Hall Of Fame: Twenty Years Of Leaders, Laggards And Economic UpheavalsMORE FROM FORBESForbes Global 2000: China’s Ranks Thin As Real Estate Woes PersistMORE FROM FORBESThe World’s Largest Technology Companies In 2023: A New Leader EmergesMORE FROM FORBESGlobal 2000: Walmart Reclaims Top Spot From Amazon Among RetailersMORE FROM FORBESThe World’s Largest Energy Companies In 2023: The Rise Of Aramco, ExxonMobil And The RestMORE FROM FORBESForbes Global 2000: The World’s Largest Airlines & Aerospace Companies In 2023MORE FROM FORBESThe World’s Largest Media Companies In 2023: Comcast And Disney Stay On Top

Checkout latest world news below links :
World News || Latest News || U.S. News

Source link

Back to top button