Seven US stocks versus an entire national equity market
A group of seven companies outpricing a national market is a statement about listed equity, not about the size of two economies.
The comparison
The original page put the Magnificent Seven's combined market cap at about $13.1 trillion and said that exceeded the equity market of China by roughly $1.6 trillion. The shock value is intentional. Seven companies, set against every listed Chinese firm in the index someone chose. The comparison is allowed as arithmetic. It is easy to misuse as economics.
Market cap is the price of listed equity. China's economy is not its equity market. A large share of Chinese corporate activity sits in unlisted firms, state entities, and listings outside the index that was used. The US economy is also larger than seven companies. The chart compared two equity slices, one unusually concentrated and highly priced, one constrained by which companies list and at what multiple.
What would make the gap normal
US mega-caps earn high margins, return cash, and are available to global savers without the governance discount investors apply to many Chinese listings. Return on Equity (ROE) and Free Cash Flow are why a dollar of their revenue receives a higher multiple. A governance or capital-control discount is why a dollar of revenue on the other side receives a lower one. The gap can be 'correct' and still be a risk, because discounts close and premiums compress, sometimes together.
Add today's caps on AAPL, MSFT, NVDA, AMZN, GOOGL, META, and TSLA if you want the live half of the old $13.1 trillion. The China half needs a current index market cap, which this site does not pretend to replace with a US screener.
The portfolio point
If seven stocks are worth more than a major national market, a global portfolio that cap-weights developed markets is making a large active bet on those seven, whether or not the investor can name them. That is the same concentration problem as the S&P 500 page, measured against a different yardstick. Know the bet. Then decide if the earnings justify it. The yardstick is not the decision.
Keep going: academy · best stocks · screener
Questions
Does this mean seven firms are bigger than China's economy?
No. It compared listed equity values. GDP, unlisted firms, and the multiple investors will pay are all outside that comparison.
Which China market was used?
The original piece used an aggregate equity-market figure for China. Different indexes (onshore, offshore, including Hong Kong) change the number. The order of magnitude was the point.