In this article, we will take a look at 15 of the biggest IT companies in the world. If you want to see more of the biggest IT companies in the world, go directly to 5 Biggest IT Companies in the World.
According to market research firm Gartner, Information Technology or IT, “is the common term for the entire spectrum of technologies for information processing, including software, hardware, communications technologies and related services.”
Given the growth in the computer, smartphone, and internet industry over the past three decades, the IT sector is the biggest sector in the market today. In terms of one of the most popular ETFs that track the S&P 500, the Vanguard S&P 500 ETF (VOO), the IT sector is largest sector by ETF weight with the sector accounting for 26.4% of the ETF as of 9/30/22. That compares to 15.1% in the healthcare sector and 11.7% in the consumer discretionary for the ETF, which are the second and third heaviest weight sectors.
Many of the world’s largest companies are also IT companies. Microsoft, for example makes software for computers to process information while Apple make smartphone hardware and software.
IT Sector Growth
In the last three decades, the IT sector has benefited from Moore’s Law and the emergence of the internet. With Moore’s law, semiconductors have become cheaper and smaller over time, allowing more people to afford computers and smartphones. With the emergence of the internet, more websites/apps have reached the scale needed to produce useful services for people with computers and smartphones. With more services, the internet, computers, and smartphones become more useful.
Given the cycle, computer hardware companies have benefited from more demand and computer software companies have benefited from more potential customers. Similarly, smartphone companies have sold a lot more smartphones and internet/app companies have benefited from having more potential users.
Although Moore’s law was just a rule of thumb and is no longer possible due to physics, computers and smartphones are now cheap enough that most of the world can afford them. With future economic growth, potential subsidies, and satellite internet, it may be possible for anyone in the world to afford a computing device and connect to the internet if they choose to a decade or two from now.
In addition to more users that could fuel more growth in the IT sector, the sector could also benefit from the emergence of new technologies.
McKinsey writes, “The emergence of cloud and 5G, for example, exponentially increases compute power and network speeds that can enable greater innovation. Developments in the metaverse of augmented and virtual reality open the doors to virtual R&D via digital twins, for example, and immersive learning. Advances in AI, machine learning, and software 2.0 (machine-written code) bring a range of new services and products, from autonomous vehicles to connected homes, well within reach.”
2022
Given high inflation, the Federal Reserve has increased interest rates six times in 2022 alone. As a result, the federal funds rate is now 3.75% to 4%, which is considered by many economists as ‘restrictive’ that could slow economic growth.
Given that many analysts think the U.S central bank will raise rates further, the potential for a recession has increased substantially.
Given the uncertainty, tech stocks have declined substantially and it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
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Methodology
For our list of 15 Biggest IT Companies in the World, we took the 15 largest companies by market capitalization in the IT sector from the S&P 500 as of 11/5.
15 Biggest IT Companies in the World
15. salesforce.com, inc. (NYSE:CRM)
Market Capitalization as of 11/5: $136.97 billion
Number of Hedge Fund Holders: 116
Salesforce.com, inc. (NYSE:CRM) is a leading cloud company that offers an enterprise platform for IT. With salesforce.com, inc. (NYSE:CRM)’s software, companies could potentially grow relationships with customers, and teams could work better with better team communication and productivity. Given the growth in the cloud in the last decade, salesforce.com, inc. (NYSE:CRM) has grown into one of the largest IT companies in the world given its market capitalization of almost $137 billion as of 11/5.
14. Texas Instruments Incorporated (NASDAQ:TXN)
Market Capitalization as of 11/5: $143.41 billion
Number of Hedge Fund Holders: 55
Texas Instruments Incorporated (NASDAQ:TXN) is one of the leading semiconductor companies in the world. Throughout its history, the company has helped the world transition from vacuum tubes to transistors to integrated circuits. For the future, Texas Instruments Incorporated (NASDAQ:TXN) has been focused on producing semiconductors for sectors such as the industrial and automotive markets that could help make electronics even more useful. Given its growth, Texas Instruments Incorporated (NASDAQ:TXN) ranks #14 on our list of 15 Biggest IT Companies in the World with a market capitalization of $143.41 billion.
13. Verizon Communications Inc. (NYSE:VZ)
Market Capitalization as of 11/5: $150.21 billion
Number of Hedge Fund Holders: 58
Verizon Communications Inc. (NYSE:VZ) is a leading telecom in the United States. With Verizon Communications Inc. (NYSE:VZ)’s cellphone and 5G service, tens of millions of people every day access the internet through the company’s network. In addition to wireless networks, Verizon Communications Inc. (NYSE:VZ) also offers broadband and fiber that also help individuals and businesses connect and potentially be more productive. As of 11/5, Verizon Communications Inc. (NYSE:VZ) has a market capitalization of slightly over $150 billion.
12. Accenture Plc (NYSE:ACN)
Market Capitalization as of 11/5: $168.22 billion
Number of Hedge Fund Holders: 61
Accenture Plc (NYSE:ACN) is a professional service company that offers strategy and consulting to the IT industry. Given its past growth, Accenture Plc (NYSE:ACN) is one of the largest consulting firms in the world with a market capitalization of over $168 billion as of 11/5 and 721,000 employees serving clients in over 120 countries. For FY22, Accenture Plc (NYSE:ACN) also generated $61.6 billion in revenue and $10.71 in EPS.
11. T-Mobile US, Inc. (NYSE:TMUS)
Market Capitalization as of 11/5: $173.82 billion
Number of Hedge Fund Holders: 96
T-Mobile US, Inc. (NYSE:TMUS) is a leading telecom in the United States that provides cell phone and internet services to tens of millions of Americans. For the third quarter of 2022, T-Mobile US, Inc. (NYSE:TMUS) had service revenues of $15.4 billion, up 4% year over year and free cash flow of $2.1 billion, up 32% year over year. Given its businesses, T-Mobile US, Inc. (NYSE:TMUS) has a market capitalization of $173.82 billion as of 11/5.
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Market Capitalization as of 11/5: $177.91 billion
Number of Hedge Fund Holders: 63
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading manufacturer of computer networking products with a market capitalization of $177.91 billion as of 11/5. Given the large market size for computer networking equipment, Cisco Systems, Inc. (NASDAQ:CSCO) is a huge company. For fiscal 2022, Cisco Systems, Inc. (NASDAQ:CSCO) reported revenue of $51.6 billion and adjusted EPS of $3.36, up 3% year over year and up 4% year over year, respectively.
9. Broadcom Inc. (NASDAQ:AVGO)
Market Capitalization as of 11/5: $190.2 billion
Number of Hedge Fund Holders: 66
Broadcom Inc. (NASDAQ:AVGO) is a leading semiconductor maker whose products are used for the data center, networking, and other IT sectors. Having expanded substantially in the past due to M&A, Broadcom Inc. (NASDAQ:AVGO) is one of the most valuable semiconductor companies in the world with a market capitalization of $190.2 billion as of 11/5. Broadcom Inc. (NASDAQ:AVGO) is currently in the process of buying cloud computing company Vmware, pending regulatory approval, to help diversify its business.
8. Oracle Corporation (NASDAQ:ORCL)
Market Capitalization as of 11/5: $199.05 billion
Number of Hedge Fund Holders: 69
Oracle Corporation (NASDAQ:ORCL) is a leading database and enterprise software company with a market capitalization of $199.05 billion as of 11/5. In the past decade, Oracle Corporation (NASDAQ:ORCL) has tried to expand in the cloud market with M&A and the strategy has worked out so far given that the company’s stock has more than doubled from 10 years ago. With more valuable stock, Oracle Corporation (NASDAQ:ORCL) could potentially do more acquisitions in the future that could expand its sales.
7. Meta Platforms, Inc. (NASDAQ:META)
Market Capitalization as of 11/5: $240.9 billion
Number of Hedge Fund Holders: 184
Meta Platforms, Inc. (NASDAQ:META) is a leading social media giant with around 3.71 billion monthly users across its portfolio of apps such as Facebook, Instagram, and WhatsApp. In 2022, shares of Meta Platforms, Inc. (NASDAQ:META) have fallen 73% year to date given the company’s substantial spending on the metaverse. Nevertheless, Meta Platforms, Inc. (NASDAQ:META) is still one of the largest companies in the world with a market capitalization of $240.9 billion as of 11/5.
6. NVIDIA Corporation (NASDAQ:NVDA)
Market Capitalization as of 11/5: $335.72 billion
Number of Hedge Fund Holders: 84
NVIDIA Corporation (NASDAQ:NVDA) is a leading semiconductor maker of GPUs which are in some ways better than CPUs for some AI and machine learning processing. Given its growth potential, NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of $335.72 billion as of 11/5. Baron Funds commented on NVIDIA Corporation (NASDAQ:NVDA) in a Q3 2022 investor letter,
NVIDIA Corporation (NASDAQ:NVDA) is a fabless semiconductor company and a leader in gaming and accelerated computing. NVIDIA is powering the growth of AI from the data center to the edge. Shares detracted due to inventory right sizing in NVIDIA’s gaming segment coupled with the broader market sell-off in growth stocks. Given NVIDIA’s end-to-end AI platform and its leading market share in gaming, data centers, and autonomous machines, along with the size of these markets, we believe the company can sustain its growth trajectory.
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Disclosure: None. 15 Biggest IT Companies in the World is originally published on Insider Monkey.
