Most valuable brands of the world - July 11, 2018

Most valuable brands of the world

The world’s 100 most valuable brands are worth more than a breathtaking $2.15 trillion. That is more than the GDP of Brazil. What’s even more surprising is that 8 of the most valuable 10 is an American brand.

Forbes updated their list of the most valuable brands for 2018. The list is based on the perception of customers, so these numbers are not simply based on hard facts, like sales and instruments that a company owns. It is influenced by the opinion of the people who buy (or don’t buy) the products. The list has some surprises, but Apple’s lead isn’t one of them.

Most valuable brands of the world in 2018

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How much are they worth?

Generally, tech companies lead the bunch, Apple being the first with a breathtaking $182.8 billion value. But it’s not only about being the first: the 100 most valuable brands are worth more than $2.15 trillion. That’s a number hard to grasp, so let’s give it some more perspective: the GDP of Brazil is “only” $2.05 trillion according to the International Monetary Fund’s data. Brazil is the 8th biggest economy of the world.

It’s not only about the top 100: the first 10 companies are worth $824.5 billion, which is close to the GDP of the Netherlands. That’s the 18th economy of the world. What’s more, the leader, Apple alone “beats” Algeria, the 55th biggest economy.

The US and tech have the lead

There is another very interesting aspect of this data. Companies from the United States have a serious lead among the biggest companies. Eight of the top 10 is American, only a South Korean (Samsung) and a Japanese (Toyota) company could make it to the elite.

It’s also important to see that tech companies are heavily represented in the top list. Six out of the ten most valuable companies are in the IT industry, while one is from the telecommunications industry. Altogether, there are 20 IT companies in the top 100, which means fifth of the companies are from the same industry.

At the moment, it’s hard to see how upcoming Chinese companies could threaten their American counterparts. Huawei, for example, barely made it to the top list: it’s 79th at the moment. It doesn’t really have a growth like Google or Microsoft either. On the other hand, the Forbes list doesn’t include the Chinese internet giants like Baidu or WeChat. They could surprise us sometime when and if their value is measured.

Is market cap different?

It’s important to see that the values above shows only how much a brand name is worth. Company value, or to put it more professionally, market capitalization of a company is a different thing. Market cap shows the accumulated value of a company’s stocks at current prices.

Biggest US companies by market capitalization

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As we can see from the chart above, America’s biggest tech companies are worth a lot more than solely their brand names in reality. Apple, for example, is worth almost $1 trillion alone, closely followed by Amazon. Although brand values (and changes in brand values) can influence market capitalizations, market cap is what really defines a company’s value, therefore that is more important for investors.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.