The rise of AI is boosting the value of listed companies

Microsoft, Apple, Nvidia and Co.

July 2, 2024, 8:00 AM | Source: dpa / Editing: Diana Künstler

The hunt for records on the stock markets continues, mainly because of the booming topic of artificial intelligence. Especially American companies like Microsoft, Apple and Nvidia benefit from this. Europe is falling behind.

The boom in artificial intelligence (AI) is driving up the value of the world’s 100 most valuable listed companies. In the first six months of the year, it rose by 17 percent to $42.3 trillion. This is a record high, according to an assessment by the audit and advisory firm EY, which was made available to the German Press Agency. The deadline for the study was June 28.

Microsoft first, Apple and Nvidia behind

At the top of the list is software company Microsoft with a value of $3.32 trillion. For comparison: Microsoft is worth 77 percent more than all DAX companies combined. At the end of June, the 40 largest stock companies in Germany had a total market capitalization of $1.87 trillion.

Apple comes in second place in the ranking, followed by chip company Nvidia. The latter increased its market value by almost 150 percent in the first half of the year, from $1.22 trillion to $3.04 trillion at the end of 2023. Other semiconductor makers such as TSMC (10th place) and Broadcom (11th place) also posted strong gains. A total of 26 technology companies were in the top 100 at the end of June.

EY boss: AI linked to enormous added value

Henrik Ahlers, EY
Henrik Ahlers has led the German EY practice together with Jean-Yves Jégourel since April 2021 and is Chairman of the Management Board of EY Germany.

EY Chairman of the Board Henrik Ahlers said: “The topic of artificial intelligence is a megatrend that is reorganizing the economic world at a breathtaking pace, inspiring the imagination of investors and stock prices.” AI technologies are used in all sectors and will also lead to drastic changes in private life in the future. “This creates enormous added value.”

However, all US companies benefited from the enthusiasm of many investors for AI. Only a few European companies currently play a significant role. These include the Dutch chip supplier ASML, the software company SAP from Germany and the British chip designer Arm. They have all been able to take up a number of important positions and have a combined market value of 812 billion dollars. But they are confronted with 18 technology giants from North America that together are worth 16.5 trillion dollars.

Europe is in the second tier when it comes to AI

Ahlers said: “Europe is currently largely in the second tier when it comes to AI and has a lot of catching up to do.” Development is happening so fast that there is a risk of falling behind. Although there are some promising AI startups in Europe, they are not listed and are far behind the American top performers in terms of turnover.

The AI ​​boom could further cement the dominance of U.S. companies in global stock markets. As of the end of June, 60 of the 100 most valuable companies were from the United States. 19 were from Europe. By comparison, in 2007, 46 were from Europe and 32 from the U.S.

“Over the past 20 years, we have seen the importance of Europe steadily decline,” Ahlers says. The majority of Europe’s top companies are not active in the technology industry and therefore hardly benefit from the AI ​​boom. There is therefore little evidence that Europe will be able to reverse this trend in the coming years.

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