Profits, not just prices, are concentrating in the ten largest
Net income of the ten largest companies is 3.6 times its 2019 level, against 1.6 times for the other 783. They now earn 40% of the panel's profits, up from 23%.
Aggregate net income, indexed
Trailing four quarters, 2019 Q4 = 100
Ten largest: NVDA, AAPL, GOOGL, MSFT, AMZN, META, TSLA, BRK.B, LLY, JPM.
What it means · inference
- Index concentration is backed by earnings, not just multiples
- Leadership rests on a handful of profit engines
- Ranked on today's size, so winners are flattered
For investors · general, not personal financial advice
- Index returns now hinge on ten companies' earnings
- A profit miss among the ten moves the index
- Broader profit growth would favour the average stock
What would change it
- The rest outgrowing the ten for several quarters
- The ten's profits slowing while their capex rises
Method
- What is measured: Aggregate trailing-four-quarter net income of the ten largest reader-safe companies by market cap (31 Jul 2026) and of the rest of a constant panel, indexed to 100 in 2019 Q4, quarterly to 2026 Q2.
- Constant panel: names with trailing four-quarter GAAP net income in every calendar quarter from 2019 Q4 to the latest quarter with broad reporting coverage.
- Ten largest = the ten largest panel names by market cap at 2026-07-31 (factor-score market cap, or close x latest shares where missing). Selection on today's size introduces look-ahead bias.
- Market-value shares use factor-score market caps at quarter-end (2019 Q4 and 2026 Q2) for the 603 panel names with a value on both dates; BRK.B has no factor-score market cap and is left out of the market-value comparison only.
- Survivor bias: history is computed on today's reader-safe universe (828 names), so companies that left the market earlier are missing and the earlier years describe today's survivors, not the market as it was.
Sources
- MCH research warehouse, quarterly statements (Alpha Vantage, as restated).
- MCH research warehouse, monthly factor scores (trailing earnings yield, market cap).
Universe
| Names in the published feed | 886 |
| Excluded: held, suspended, withdrawn, deferred, deal-pending or pending review | 58 |
| Reader-safe universe | 828 |
| Dropped: missing net income in at least one quarter since 2019 Q4 | 35 |
| Used in this exhibit | 793 |
Names whose rating is held, suspended, withdrawn, deferred or under a pending deal are excluded from every exhibit, so no held output appears here.
General and impersonal investment research. Not personal financial advice. Forecasts, valuations and model outputs are estimates and may be wrong. See Investment Disclaimer.
MCH Analysis is a general investment-research publication of MCH Advisory (Pty) Ltd. It is not personal financial advice and does not take your circumstances into account. MCH is not a licensed financial services provider or a registered investment adviser. Past performance, whether actual or simulated, does not predict future results. Subscriber Agreement | Privacy and Cookie Notice | Research Governance Policies