Do you remember when Apple became the first company to cross the $1tn threshold on Wall Street? I did not, so I checked this morning: it was on August 2, 2018. At the time, Amazon and Alphabet were vying for second place, each with a market capitalisation of $880bn. This Reuters dispatch, which I dug out of our database, captures the mood of eight years ago, and also reminds us that PetroChina had in fact briefly been valued at more than $1tn in 2007. But that is another story.

In 2026, a market capitalisation of $1tn is still far from ordinary, but it is no longer exceptional. The proof? Two new members have joined the club in the past 24 hours. They are both memory-chip companies: America's Micron and South Korea's SK Hynix. The former is up 860% over one year, the latter 1,000%. Out of kindness, I shall spare you what analysts were saying about the memory-card sector not so very long ago. Two years ago, the average price target on Micron was $145, below its share price at the time. The stock closed last night at $896, up 20%. There are now 13 companies worldwide worth more than $1tn: 10 American, two Korean, Samsung Electronics and SK Hynix, and one Taiwanese, TSMC. As I noted yesterday, Europe's last representative in the global top 20 is ASML, worth $621bn. It belongs to the same semiconductor ecosystem as the latest entrants, albeit further upstream in the value chain.

What the $1tn club has in common is that its members are technology companies. Well, almost. Berkshire Hathaway, the holding company run by investment sage Warren Buffett, keeps the flag flying for value investors. That said, Berkshire still has several tens of billions invested in Apple and Alphabet, which undoubtedly helps offset the rest of its more traditional exposure. The recent entrants, meanwhile, have all crossed the threshold thanks to the acceleration of AI: Broadcom, which is on course to pass the $2tn mark if all goes well, TSMC, Samsung Electronics, Micron and SK Hynix are all, or have all become, AI companies.

In Europe, then, there is no short-term candidate for the $1tn club. Nor, for that matter, is there one over the medium term. But the forces at work are the same: with a few rare exceptions, notably satellite companies OHB and Eutelsat, all the strongest performers in Europe since 1 January have been semiconductor companies: Sivers, Soitec, 2CRSi, Aixtron, AMS-Osram, STMicroelectronics, SUSS Microtec, BE Semiconductor, Infineon… all these shares have at least doubled since the start of the year. The quality is not always there, but for now investors are being led by the direction of travel.

There is nevertheless one fairly striking, and somewhat paradoxical, difference between the European stocks mentioned above and some members of the $1tn club: the earnings multiples of the US and Asian giants are far from excessive, Tesla aside, despite their recent share-price gains. Their current and prospective earnings are so substantial that Nvidia, for example, trades on 17.2 times expected 2027 earnings. TSMC is on 19 times. Micron is down at 7.3 times. SK Hynix is lower still, at 5.05 times. By way of comparison, L'Oreal's 2027 P/E is 25.5. ABB's is 32. Micron and SK Hynix's historically low valuations reflected a highly cyclical business with modest margins. For now, however, they are proving a powerful draw for investors, who are betting on an AI supercycle to reduce cyclicality and lift margins on a lasting basis. It is a bold wager that would be blown away in the event of a reversal, but it has been a calculated and winning bet for several months.

This persistent enthusiasm for technology stocks and for AI's golden goose allowed the Nasdaq 100 to set a closing record at 30,001 points yesterday, with a gain of 1.8%. The advance was driven mainly by semiconductors, as heavyweights such as Apple, Microsoft and Amazon edged lower. The Dow Jones, by contrast, missed out, slipping 0.2%. European markets ended the session in the red, with a few exceptions, after their gains the previous day. As a reminder, Monday was a public holiday in the United States, Switzerland and the United Kingdom.

The lack of progress on Iran, or at least the uncertainty over whether progress is being made, did little to weigh on Wall Street yesterday. In Asia this morning, the mood is a little heavier. China and Hong Kong are lower, while Japan, India and Australia are slightly higher. South Korea, up 3.1%, and Taiwan, up 1.8%, are still flying. Europe is hesitant, but with a positive bias.

Today's economic highlights:

See the full calendar here.

  • GBP / USD: US$1.34
  • Gold: US$4,498.63
  • Crude Oil (BRENT): US$97.85
  • United States 10 years: 4.47%
  • BITCOIN: US$75,581.7

In corporate news:

  • Pernod Ricard is alleged by India to have withheld Scotch composition and age details in an effort to pay lower tariffs.
  • BP plc's former chairman Manifold disputes accusations of wrongdoing, according to Bloomberg News.
  • New vehicle registrations rose by 7.3% in April across the EU, according to ACEA.
  • Brazil has announced the approval of a synthetic version of Novo Nordisk’s Ozempic.
  • Generali issues a €750 million Tier 2 subordinated bond.
  • Spanish defense group Indra appoints Renault’s chief strategy officer as CEO
  • Volvo Cars secures a U.S. exemption for its Chinese connected technologies.
  • CVC sells its 13.8% stake in Naturgy for approximately €4 billion.
  • Wacker Chemie reduces its stake in Siltronic.
  • Webster Financial accepts Banco Santander’s $12 billion buyout offer.
  • Latour finalizes the sale of stakes in Securitas and Assa Abloy for 5 billion kronor.
  • Musk discussed a merger between Tesla and SpaceX with his colleagues, according to CNBC.
  • Nvidia will invest $150 billion annually in Taiwan, the “epicenter” of the AI revolution, according to its CEO. Taiwan also suspects that Nvidia chips are being smuggled to China via Japan, according to Bloomberg.
  • Applied Materials and Screen Semiconductor are strengthening their collaboration in chip manufacturing processes.
  • ByteDance is seeking Qualcomm for an AI chip contract.
  • Iren is set to acquire Blackwell systems from Dell for approximately $1.6 billion
  • Baker Hughes has extended a deepwater drilling contract with Petrobras in Brazil.
  • Lockheed Martin has secured a $100.5 million contract with the Navy.
  • Xylem is finalizing the sale of Sensus’s international metering business.
  • Rocket Lab is finalizing the acquisition of Motiv Space Systems.
  • SK Hynix has surpassed the symbolic milestone of $1 trillion in market capitalization.
  • Today’s key earnings reports: Marvell Technology, Salesforce, Bank of Montreal, Synopsys, The Bank of Nova Scotia, National Bank of Canada, Snowflake, HEICO Corporation, Agilent Technologies, Everpure…

See more news from UK listed companies here

Analyst Recommendations:

  • Land Securities Group Plc: Bernstein maintains its outperform recommendation and raises the target price from GBX 770 to GBX 800.
  • Atalaya Mining Copper, S.a.: Berenberg maintains its buy recommendation and raises the target price from GBX 950 to GBX 980.
  • Tate & Lyle Plc: Berenberg maintains its hold recommendation and raises the target price from GBX 464 to GBX 554.
  • Cranswick Plc: RBC Capital upgrades to outperform from sector perform and raises the target price from GBX 5500 to GBX 6100.
  • Auto Trader Group Plc: Peel Hunt upgrades to buy from add and reduces the target price from GBP 8.90 to GBP 6.30.
  • Halma Plc: Morgan Stanley maintains its equalwt recommendation and raises the target price from GBX 3860 to GBX 4500.
  • Victrex Plc: Barclays maintains its equalweight recommendation and reduces the target price from GBP 6.60 to GBP 6.10.
  • Standard Chartered Plc: China Securities Co., Ltd. maintains its buy recommendation and raises the target price from HKD 230 to HKD 252.
  • Intercontinental Hotels Group Plc: JP Morgan maintains its overweight recommendation and raises the target price from USD 162 to USD 177.
  • Legal & General Plc: UBS maintains its neutral recommendation and raises the target price from GBX 250 to GBX 260.
  • Shell Plc: Zacks downgrades to neutral from outperform and reduces the target price from USD 102 to USD 91.
  • Aberdeen Group Plc: JP Morgan maintains its overweight recommendation and raises the target price from GBP 2.40 to GBP 2.41.