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The valuation of the largest companies in the world fluctuates day to day, even minute by minute, but true success is a marathon, not a sprint.

You heard the news: propelled by the AI frenzy, the chipmaker Nvidia passed the $3 trillion market cap and became the most valuable company in the world by market capitalization—for a few days last June, that is. Since then, things have returned more or less to what they used to be: as of September 3, 2024, when the market closed, Apple was still the king of the stock exchanges, closely followed by Microsoft. Incidentally, that was also the day when, amid a stock selloff, Nvidia lost $279 billion in market value, the largest wipeout in U.S. history (while still managing to retain the third spot).

Then again, Apple’s dominance is not to be taken for granted. After all, over the years, it lost the title of the world’s largest many times—more frequently, and very recently too, to Microsoft, but also to Amazon, Google, and even Saudi Arabia’s state oil giant Aramco. Market capitalization can change quickly, and in recent years the rankings of the world’s largest companies have seen some significant shifts.

How these companies get to the top, and how they get to stay there, has changed too. For years, Apple has often seen its market cap fall victim to its sales success. While the popularity of products such as the iPhone, Mac and iPads propelled Apple to new heights, whenever sales appeared to slow its market capitalization suffered.

By contrast, Microsoft built itself into one of the world’s largest companies with a focus on steady recurring revenue streams. You might not need a new smartphone or laptop every year, but a software license, cloud-computing package or video game subscription means ongoing payments—and client stickiness.

Then Apple started borrowing from Microsoft’s playbook: it launched news and games subscriptions, a video streaming service, and even its own credit card. Once Apple moved beyond hardware to software and services, its revenue growth became unstoppable. On January 3, 2022, Apple became the first company ever to surpass $3 trillion in market value, and it is still the world’s largest today.

Market Cap Leaders Change With The Times

Today, most of the top 10 companies by market capitalization are technology firms. Until a decade ago, many of the most valuable firms were traditional long-standing blue-chip industrial behemoths like Exxon, Chevron, General Electric or AT&T.

This is not to say that traditional sectors have lost all their appeal. Saudi Aramco continues to rank in the top 10, and Exxon, another oil giant, is hanging on in the top 20. Finance and healthcare are also represented. Berkshire Hathaway leads with a market value of over $1 trillion; Visa and Mastercard make the top 20 with a market cap of about $500 billion. Meanwhile, U.S. healthcare companies UnitedHealth Group and Eli Lilly, and Denmark’s Novo Nordisk are also in the top 20.

Yet, more often than not, the biggest companies by stock market valuation tend to be tech firms, even if they make things (Tesla) or sell things (Amazon)—not only that, rather than being a one-time purchase, these physical objects can often continue to generate steady and predictable revenue streams over long periods of time. Tesla, for example, has monthly fees for its autopilot and self-driving features, as well as for its premium connectivity package; Amazon offers all kinds of subscriptions and premium subscriptions linked to its Alexa, Fire TV, and Kindle devices.

Today’s Headlines vs. Strong Fundamentals

Successful strategy (and product, and timing, and management) aside, the total dollar value of a company’s outstanding shares can be affected by a myriad of other unpredictable factors. It was not too long ago that a controversial tweet by former U.S. President Donald Trump could send the stock markets spiraling downward or soaring to new highs without much rationale to support the move.

Then, there are even unforeseeable events like the Covid-19 pandemic. So-called stay-at-home stocks, particularly digital platforms and those in e-commerce, saw significant gains as shutdowns and remote working drove demand for new technologies. Conversely, tourism stocks and live entertainment services plummeted. When vaccines became available and the global economy slowly began to reopen, the landscape shifted once more: companies that had thrived during the shutdowns saw their values drop, while those poised to benefit from the reopening experienced a resurgence.

Focusing too closely on ever-changing share prices, investor sentiment, and world events rather than on underlying fundamentals can be misleading. Warren Buffett, the chairman of Berkshire Hathaway (currently the 8^th most valuable company), famously said that the stock market is a device for transferring money from the impatient to the patient.

Fear often drives decisions when it comes to buying and selling stocks, but even in these tumultuous times, amid lingering high inflation rates, the U.S. election, the war in Ukraine and Gaza, and a myriad of other geopolitical tensions and uncertainties, many businesses have experienced relatively little change in terms of assets, market share, revenues, cash flow, headcount, guidance and R&D.

Market Cap Is Not Everything

This is why, to determine which is the largest, Fortune’s annual Global 500 list ranks the world’s top corporations by revenue instead of market capitalization. Where does Apple, the most capitalized company in the world, stand in Fortune’s ranking? By using the revenue metric, Apple—which made it into the top 10 for the first time only a few years ago—ranks just 7th globally and, along with Amazon, is the only big American tech company making the top 10. Meanwhile, supermarket juggernaut Walmart takes the top spot. When ranking companies by revenue, technology stocks do not fare as well as when they are ranked by their market value.

Why, then, do stock investors often prefer to pour money into startups that generate significant buzz but minimal or no revenue? Precisely because they hope to discover the next Apple or Amazon and turn hundreds into millions. Both Steve Jobs and Jeff Bezos, after all, always maintained that investing in future profitability through new products and services takes priority over hitting earnings estimates.

There is just no simple way to fully ascertain the size, influence and outlook of a company. To that end, the annual Forbes Global 2000 list takes yet a different approach—a multi-dimensional one. It ranks the world’s largest companies by using a composite score achieved by weighing revenues, profits, assets, and market value equally. Once again, different metrics will yield very different results: in this ranking, financial holding company JPMorgan Chase takes the top spot, while Apple is only twelfth, and Walmart barely makes it into the top 20.

In conclusion, while it is relatively straightforward—using economic, technical, and organizational criteria—to tell a large company from a small one, determining which is truly the largest is far more complicated. Is it Apple, with its massive market capitalization; Walmart, with revenues through the roof and over 10,000 stores across 19 countries; or JPMorgan Chase, with its huge assets and soaring profits? Size, like many things in life, is in the eye of the beholder.

Size, like many things in life, is in the eye of the beholder.

EDITOR’S NOTE: The annual Forbes Global 2000 ranks the world’s largest companies, listing the “best” based on Forbes’ composite score of revenues, profits, assets, and market value.