Big Tech and Big-Box Retailers Barging In

Apple's $2 trillion valuation, FAANG's rapid increases in market cap, and Target blowing competitors out of the water

Yesterday, the S&P hit a record-breaking closing high of 3,389.78. At least for now, this new high has held up, trading slightly above yesterday’s close.​

Since the beginning of the pandemic, the S&P is up 52% from its lows.

The index’s swift and momentous move upward has largely been driven by big tech. Today, Apple has reached the $2 trillion market cap threshold, making it the first U.S. company to reach a $2 trillion valuation. 

Apple is up roughly 0.7% on the day, and has been up 20.89% since its latest earnings report was released on July 30th

At this level, Apple’s valuation alone is almost as much as the total market cap of the Russell 2000. 

During the course of the pandemic, FAANG stocks have quickly become the heavy weights in terms of the overall S&P 500 market cap, hovering around 20%. Up more than 5% from its January level close to 14%. 

Also today, big-box retailer, Target, announced its Q2 earnings, reporting its largest quarterly sales increase in its 58 years of operation. Target’s CEO Brian Cornell reported a 24% year-on-year rise in like-for-like sales. Its stock is up 12% on the day at the time of recording. 

This increase in sales can be linked to the strong consumer demand the company reported across all categories—electronic sales have increased by more than 70%, home goods like kitchenware by 30%, and food, beverage, and other essentials by 20%. In the past three months ending August 1st, Target has raked in $23 billion in revenue, which is $4.5 billion more than the same period last year, and net income rose from $938 million to $1.69 billion. 

With the varied product selection typical of big-box retailers, its status as essential businesses during the national lockdown, and a strong e-commerce presence, Target has a leg-up over other struggling retailers. Target has even outshined Walmart’s performance, with its comparable sales in the U.S. rising only 9.3%. 

RELATED CATEGORIES: Daily Briefing, Technology, U.S. Economy