Out of the top 50 most profitable companies globally last year, the list is full of financials 14, energy 12 and 8 in technology.
These global corporate titans have annual revenues that dwarf the GDPs of most countries.
In other words, the 50 most profitable companies have revenues exceeding the sum of the economic activity of most countries.
The twilight era of democracy is morphing into a corporatocracy, where economic, political and judicial systems are controlled or influenced by business corporations or corporate interests.
Moreover, a handful of corporate titans are worth more than the market capitalization of entire stock markets.
The Magnificent Seven stocks include Apple, Amazon, Microsoft, Alphabet, Meta, Nvidia, and Tesla, where most make the list of 50 most profitable companies globally.
Their combined market capitalization of about 18 trillion dollars is more than the sum of the entire market capitalization of stocks in Europe, and it was about 33% of the S&P 500, which has a disproportionate influence on the S&P.
“The 50 most profitable companies have revenues exceeding the sum of the economic activity of most countries”
WIN INVESTING
Location of the top 20 most profitable companies
More than half of the 20 most profitable countries are in the USA, which created 11 titan corporate cash cows. China has 4, Saudia Arabia 1, Japan 1, Switzerland 1, Brazil 1, Tawain 1.
Sectors where the top 20 most profitable companies operate
Nearly half are in financials, with eight companies defining their activity as finance.
Technology is the second sector with 6. Next is the energy sector, with three companies. The Auto sector has two, and Healthcare 1.
In other words, the most profitable companies operate in the financial, technology, auto and energy sectors.
“More than half of the 20 most profitable countries are in the USA”
WIN INVESTING
Naming the 20 most globally profitable companies
Saudi Aramco, an energy company generating 120.7 billion dollars of profits in 2024, tops the list of the most globally profitable companies.
Saudi Aramco, officially the Saudi Arabian Oil Company or simply Aramco, is a majority state-owned petroleum and natural gas company, which is the national oil company of Saudi Arabia. As of 2024, it is the fourth-largest company in the world by revenue.
The company headquarters is in Dhahran.
Saudi Arabia has the largest oil reserves globally.
Aramco’s production costs are $3 a barrel, a fraction of Western oil producers. So, the Saudi energy company generates more profits than any other energy company globally.
Despite this, the company stock price is down 1.22% over five years.
“Three of the most globally profitable companies making the top five list in 2024 are American technology companies founded less than five decades ago” – Win Investing
Apple comes second in the list of most profitable companies globally due to its high-margin services arm and iPhone sales, generating $97 billion in profits.
Its success lies in a strategic vision, from simple desktop computing to mobile devices and wearables. Its customer loyalty base is due to its performance and design, driving the Apple brand globally.
Warren Buffett’s Berkshire Hathaway conglomerate holding company came in at third, with $96.2 billion in profits.
But Berkshire Hathaway delivered third-quarter 2024 operating earnings of $10.1 billion, which decreased 6.2% year over year.
Alphabet (Google) technology was the fourth most profitable company globally, generating $73.8 billion in 2024.
Alphabet delivered an EPS of $8.03, up 38.5% from $5.80 in fiscal 2023. The American multinational technology conglomerate holding company with ticker symbol GOOGL earnings is expected to grow 11.1% year-over-year to $8.92 per share in 2025.
Microsoft comes fifth, generating $72.4 billion in profits in 2024.
Three of the most globally profitable companies making the top five list in 2024 are American technology companies founded less than five decades ago, Apple 1976, Google 1998 and Microsoft 1975.
Here are the top 20 of the most globally profitable companies in 2024, in USD, based on data from Fortune.
- Saudi Aramco B120.7, Energy
- Apple B97, Technology
3 Berkshire Hathaway B96.2, Financials
4 Alphabet, B73.8,Technology
5 Microsoft B72.4,Technology
6 Industrial & Commercial Bank of China, B51.4, Financials
7 JPMorgan Chase B49.6,Financials
8 China Construction Bank, B47.0, Financials
9 Meta Platforms B39.1, Technology
10 Agricultural Bank of China B38.0,Financials
“the Magnificent 7 has a market cap of nearly 34.6% of the S&P 500 market capitalization, equivalent to $16 trillion“
– Win Investing
11 Exxon Mobil B36.0, Energy
12 Johnson & Johnson B35.2,Health Care
13 Toyota Motor B34.2,Motor Vehicles & Parts
14 Bank of China B32.8, Financials
15 Amazon B30.4,Retailing
16 Nvidia B29.8,Technology
17 UBS Group B27.8, Financials
18 Taiwan Semiconductor Manufacturing B27.4, Technology
19 Bank of America, B26.5, Financials
20 Petrobras B24.9, Energy
China had four of the most profitable global companies in 2024.
Three decades ago, China was nowhere to be seen on the list.
Six of the most profitable companies globally in 2024. are located in Asia.
Only one is in Europe, with UBS Group B27.8, Financials.
Regarding the most profitable companies in the world, what are the opportunities and risks for investors?
The concentration of a few titan companies generating the lion’s share of profits could create concentrated risks for investors.
As explained above, the Magnificent 7 has a market cap of nearly 34.6% of the S&P 500 market capitalization, equivalent to $16 trillion.
That makes diversification more difficult. So, if you are buying an ETF S&P Index, believing you are well diversified, you will not be sheltered from a Magnificent 7 stock crash if it were to happen.
Moreover, disruptive technologies could mean betting on the current Titans may not be your best play.
Out of the Nifty Fifty, a group of 50 large-cap stocks on the New York Stock Exchange in the 1960s and 1970s, notice that not one features among the most profitable companies globally in 2024.
The opportunity is to spot the next Google, Apple or Amazon, but that can be risky.
Think about it. For every star performing stock, how many of those who attempted actually failed?
