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Big 10 Effect?

Steve LeCompte | | Posted in: Size Effect

Have we entered an era when only the biggest firms can afford the massive investments needed to field hot, globally scalable technologies (e.g., artificial intelligence)? To investigate, we ask Grok to identify the 10 largest NASDAQ firms by market capitalization (Big 10) over the last 10 years. We then compare annual average next-year total returns of Big 10 stocks to that of Invesco QQQ Trust (QQQ). Using end-of-year dividend-adjusted stock prices for the 10 largest NASDAQ firms by market capitalization and for QQQ during 2015 through 2025, we find that:

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