Here’s something you might ask if you wanted to justify the swollen market-caps of America’s tech behemoths: “The railroad stocks were more than 60% of market cap in the late 1880s, why can’t the Magnificent 7 get to the same level?”

The quote’s not actually a quote. It’s from BofA’s Michael Hartnett who, each week, describes the current market zeitgeist by way of things people might say. Typically, the zeitgeist “quotes” have an element of caricature, but they’re more or less consistent with prevailing sentiment.

Currently, sentiment’s bullish for the Mag7, most of which — Nvidia’s yet to report — delivered impressive quarterly results last month. Tesla’s in a “transition period,” to put it politely, but if you just sort of set it aside and pretend it’ll work itself out, the rest of the group’s in fine fettle apparently.

Sure, investors turned their nose up at Andy Jassy for “failing” to clear another company’s cloud growth bar (AWS growth was miles below Azure), but Amazon’s fine. Even Tim Cook managed to post solid revenue growth, no small feat for Apple which, in its innovation-impaired state, is starting to look more like a utility than anything else.

Nitpicking aside, Microsoft, Meta, Alphabet, Apple and Amazon all beat on the top and bottom lines for their most recent quarters and as discussed here earlier this week, Mag7 EPS growth will be 26% for Q2 assuming Nvidia’s results match consensus. That’s 22ppt better than the meager 4% growth for the rest of the index. As Hartnett put it, employing rarely-used slang, “Different gravy!”

The charts are simple, and that’s on purpose. Unfortunately, it’s early August and not a lot’s going on. I’ve learned from a decade of experience writing for public consumption that trying to work people’s brains when those brains don’t want to be worked can be… well, counterproductive, I’ll put it that way.

The figure on the left shows you just how dominant sectors can get when they have a de facto monopoly on a revolutionary technology. The figure on the right’s just a reminder that tech outperformance is parabolic. We long ago passed the Nifty Fifty, dot-com and 2021 “stimmy” highs.

If you’re curious as to other market-cap dominance peaks (i.e., an addition to the 63% share commanded by the railroads in 1881), Hartnett rattled them off. The Nifty Fifty peaked at 40% in 1972, Japanese shares at 45% of the global market in 1989 and tech at 40% of the S&P in 2000.

Currently, the Mag7’s about 35% of US market cap. So… room to run?