-- I should say up front that I got started on this article partly because of Carey’s great post about his tech-inspired fantasy fund - it’s an inspiring read! --
One of the biggest stories to come out of the US stock market over the past decade has been the spectacular rise of technology stocks. The relentless run in the S&P 500 has gone hand-in-hand with the growth of so many leviathan-like companies.
Some of the best known names have been Facebook, Amazon, Apple, Netflix and Alphabet’s Google (the so-called FAANGs). Then there’s Microsoft, which is currently the biggest of the lot. Beyond them are dozens and dozens more multi-billion dollar tech groups. And while prices fell sharply across the sector last autumn, many have rebounded very quickly.
By contrast, UK quoted tech stocks have had nowhere near as much influence on the market here. To be fair, there have been some big wins. But successful tech has not been ubiquitous like it has in the States. So are UK investors missing out - or is the tech sector simply a different beast in the UK that still holds speculative upside for those who know where to look?
Inspiration from Silicon Valley
Right now, there are 88 stocks in the US technology sector that are valued at more than GBP £10 billion each. Twenty-four of them are valued at more than £50 billion and 11 at more than £100 billion. Microsoft, the most valuable of all, is valued at £665 billion (or around US $822 billion). That’s around $10 billion more than Apple - which is pretty much a rounding error when you get to this sort of size.
But while the big fish in US tech are genuinely huge, the pool of tech companies in the States is deep and wide. There are more than 830 companies classified in the sector, and while many are huge by most standards, hundreds more of them are small- and micro-cap plays. So the choice for investors is vast.
Alongside predominantly American companies are a few foreign names that have chosen the US as a destination to get quoted. You can count among them the likes of Alibaba, Baidu and Weibo from China. Then there’s Spotify from Sweden/Luxembourg,
