There’s A New World Order As 4 Big Stocks Like Tesla Fall To Pieces| Investor’s Business Daily

Want to see just how badly stocks like Tesla (TSLA) have fallen to pieces? Just look at the new top 10 most valuable companies in the S&P 500 — it’s almost an entirely different list this year.

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Gone are Tesla, Nvidia (NVDA), Meta Platforms (META) and JPMorgan Chase (JPM). And in are Johnson & Johnson (JNJ), Exxon Mobil (XOM), Visa (V) and Walmart (WMT). In fact, half the top 10 most valuable companies in the S&P 500 are new this year.

Ramifications for such upheaval are giant as trillions of dollars are benchmarked or invested in the S&P 500. And the most valuable stocks hold the largest sway in the index.

Out With The Old: Tesla’s Amazing Implosion

Tesla is one of the most dramatic examples of the shake-up at the top of the S&P 500. Falling 68% this year, the company that was the fifth most valuable U.S. company in January isn’t even in the top 10 anymore. It ranks just thirteenth now, with a market value of $357 billion. Tesla’s value is down $707 billion this year.

But the plunge of Meta Platforms is fascinating, too. Shares of the social media giant stumbling to pivot into virtual reality are down 66% this year, erasing $609 billion. That means the company, which in January was the sixth most valuable in the S&P 500, now ranks just 19th at $307 billion.

“Like many people, we have been watching Tesla’s recent slide with a bit of amazement, if not morbid fascination,” said Nicholas Colas of DataTrek Research. “The stock is now down (more than 60%) on the year, vying with Meta/Facebook as the worst Big Tech stock blowup of 2022.”

In With The New: Welcoming New S&P 500 Titans

Just as the market has tossed out some top 10 members, others rose to take their places.

Exxon Mobil has enjoyed the most meteoric rise in the S&P 500. The energy giant jumped this year almost like tech stocks did in the boom. Shares of the energy giant soared 80% this year, adding $195 billion in market value. That surge in market value — more than with any stock in the S&P 500 — makes Exxon Mobil the eighth most valuable stock in the S&P 500. It’s remarkable to think that it only ranked 27th most valuable in the S&P 500 a year ago.

It’s stunning to see Exxon Mobil coming back so quickly. It wasn’t even in the S&P 500’s top 10 since 2018 (when it was ninth). But this is a company that was once dominant. It was the very most valuable S&P 500 company as recently as 2011, until Apple surpassed it in 2012.

Health Care Rises

Another interesting trend among the new top 10 in the S&P 500 is the rise of health care. Two of the most valuable stocks in the S&P 500 are now from the health care sector: UnitedHealth and Johnson & Johnson.

Shares of UnitedHealth are up 6.2% this year, an impressive feat in a year the S&P 500 is off nearly 20%. The health care giant now ranks No. 6 in the S&P 500, up from No. 9 at the start of the year. And Johnson & Johnson is new to the top 10. Shares are up 3.9% this year, making the company the S&P 500’s seventh most valuable company, up from No. 12 a year ago.

Stability At The Top

That’s not to say the S&P 500’s top 10 is completely turned upside down. Apple (AAPL) is still the S&P 500’s most valuable stock despite losing 27% of its value this year. It’s still valued at more than $2 trillion. And rounding out the top four are Microsoft (MSFT), Alphabet (GOOGL) and Amazon.com (AMZN).

But guess who’s coming on strongest? Warren Buffett’s Berkshire Hathaway (BRKA). Shares are up 2.6% this year. That might not sound like much, adding $8 billion in market value this year. But it’s enough to make Berkshire Hathaway the No. 5 most valuable company, ahead of Tesla and Meta. Berkshire Hathaway was No. 8 in January.

And like Exxon Mobil, Walmart is rejoining the S&P 500’s top 10 as No. 10. Walmart is back, after dropping out of the top 10 in 2020.

Looks like the new world order isn’t entirely new, after all.

S&P 500: The New Top 10

Sources: S&P Global Market Intelligence, IBD