Today the five largest U.S. companies are all in the technology sector. That wasn’t the case in the 1980s. Back then there was IBM and everyone else. IBM’s market capitalization was larger than all other companies, not just tech stocks. It was deemed so secure that at one point its bonds yielded less than U.S. Treasuries! IBM was untouchable … until it wasn’t.

Sticking with the 1980s, the ten largest stocks included AT&T and Eastman Kodak. These, too, seemed untouchable but eventually succumbed to competition.

In the 1990s all but two of the largest worldwide companies were Japanese. Many in our country feared Japan’s economy would surpass our own. Not so fast.

In 2000 the second largest company was General Electric. Twenty-four years later GE’s market-cap still hasn’t recovered from that peak. Cisco Systems was the third largest and it, too, is below its 2000 high. AIG was the 14th largest company. It required a government bailout.

By 2010 Exxon Mobil and Microsoft topped the list of largest companies and both are still doing well. But that list also included Intel, a company whose stock has fallen 70 percent since 2021 and is near its 2010 level.

What’s my point? In each of these time periods investors expected continued dominance from the largest companies. It was inconceivable that their fates would sour. But in every historical list there were some companies whose fortunes turned south. Investors loved Eastman Kodak’s film dominance until the digital camera arrived. AIG was a financial powerhouse until the financial crisis.

Even Microsoft, which has remained in the list of largest companies for several decades and is the third largest company today, went sideways for 15 years after the internet bubble burst. They whiffed on the smartphone and promoted Windows Vista. Ugh.

Although it seems inconceivable now, there will be a couple of losers on today’s list of largest companies (Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta Platforms, Tesla, Berkshire Hathaway, Broadcom, and Eli Lilly). Nvidia dominates the AI chip market but others want a slice of that pie. Apple’s products are known for their unique design and user experience but its profits are only growing about five percent. Tesla investors believe in the ambitious plans of its charismatic CEO. Which the ten will falter?

As an investor, one shouldn’t look at how companies are doing now because they are all doing well. The key is to anticipate their future. Given history, one or two of today’s largest and most successful companies won’t remain dominant.

David Vomund is an Incline Village-based Independent Investment Advisor. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.