Four technology giants now sit on top of the list of most valuable U.S. companies, each worth more than $1 trillion — and there's a familiar theme to each of their stories.
Apple, Amazon, Microsoft and Google parent Alphabet have all looked to services and cloud businesses for growth in the past couple of years. In turn, the market has rewarded the companies richly, as each of the tech companies' market values have climbed to record levels.
A year and a half ago Apple became the first U.S. company to surpass the $1 trillion mark, doing so in August 2018. Analysts at the time noted Apple's growing software and services revenue as catalysts driving the valuation.
Five weeks later, Amazon reached $1 trillion for the first time. Although Jeff Bezos' e-commerce giant was only above that benchmark for a short time, analysts again pointed out how Amazon Web Services – its cloud business – was a key driver of the company's growth.
Microsoft was the third to pass $1 trillion last April, its value driving higher after a better-than-expected earnings report. Its sales growth that quarter was, like the others, driven by growth in its public cloud service Azure, with big corporations handing off servers and data storage to Microsoft.
Then Alphabet hit a $1 trillion, just two weeks ago. While its cloud growth has lagged behind Amazon and Microsoft, Alphabet doubled its cloud services revenue run rate to $2 billion per quarter from $1 billion per quarter between February 2018 and July 2019.
Finally, while Amazon had fallen off the pace last year, the company on Friday once again joined the trillion-dollar club. After a knockout earnings report, Amazon's market value gained about $96 billion from Thursday's closing price – a one-day gain that is bigger than the entire market value of either UPS or 3M.
These tech companies are dwarfing the rest of the stock market, too. The four make up 17% of the S&P 500's total market value, a level of dominance that Morgan Stanley says is unprecedented.