ASSESSMENT OF THE POSSIBILITY OF SIGNIFICANT GROWTH OF CORPORATE SHARES WITH LARGE CAPITALIZATION

Abstract

In the stock market, there have always been corporations with relatively large capitalization. The main reason for this condition is a significant increase in the value of their shares resulting from an increase in profits and the volume of sales of products (goods, services). The size of the market and the financial capacity of investors have certain boundaries that call into question further substantial growth in the capitalization of such corporations. Under these conditions, the study of the hypothesis regarding the impossibility (or possibility) of a significant growth in shares of the corporations that are already leaders in the level of capitalization in the stock market is important. Confirmation of this hypothesis will lead to the change in the paradigm of investment processes in the stock market, which were significantly influenced by analysts’ ratings. The purpose of the work is to assess the possibility of further significant growth in the capitalization of corporations, which are already leaders in terms of capitalization volumes in the stock market. The work used a method of historical comparison, that is, we compared the dynamics of the value of corporate shares of different capitalization levels (relatively large). The factors that both contribute to the corresponding growth and inhibit this process have been determined. A quantitative study of the influence of these factors was carried out through the example of corporations being the leaders in terms of capitalization: Microsoft and Apple. It was found out that the level of growth in such capitalization depended mainly on the level of innovation and consumer utility of the product brought to the market by these corporations. It was revealed that when introducing an innovative product to the market, shares of the corporation of large capitalization can grow significantly, however, compared to the corporations of less capitalization, the growth rate is much lower due to the limited volume of the money supply in the economy. The hypothesis under consideration has not been fully confirmed or completely refuted. The ratio of the total capitalization of the corporation to the GDP of a particular country was not of a significant value. The relation between the growth level in capitalization of the corporation, which is the leader in this indicator, on the volume of the money supply in the economy in various aggregates was indirectly confirmed. The volume of corporate capitalization for 2021 has been specified, which, due to the limited money supply in the economy, restrains its substantial growth by the levels exceeding 100% of the value per year.