All are certainly super-cap names, but their volatility could not be more different. Microsoft has “only” doubled over the same timeframe and is 6.3 percent of the S&P. To see how well that theory holds up in practice, we pulled the last 2 years of 50-day price volatility data (standard deviation of returns) for Tesla, NVIDIA, and Microsoft. The first 2 are up 10x and 5x respectively since the start of 2020 and now each represent 1.9 – 2.0 percent of the S&P 500. An index like the S&P 500, full of multi-billion-dollar market cap companies, should be less volatile than an emerging market country index.
It is a long-established stock market maxim that as valuation increases volatility decreases. Large cap stocks should be less volatile than small caps.
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