The Fortune 500 is an annual list of the 500 largest companies in the United States, ranked by total revenue. Published each year by Fortune magazine, it serves as one of the most widely recognized benchmarks for corporate size and success in the American economy. When someone refers to a “Fortune 500 company,” they mean a business large enough to rank among the top 500 by how much money it brings in.
How Companies Make the List
The ranking is straightforward: Fortune takes the annual revenue figures reported by the largest U.S. companies and sorts them from highest to lowest. The top 500 make the cut. Both public companies (whose stock trades on an exchange) and private companies (which are privately owned) are eligible, as long as they meet two basic requirements. The company must be incorporated and operate in the United States, and it must file financial statements with a government agency so its revenue figures can be verified.
Revenue, not profit, is the metric that matters. A company could lose money for the year and still appear on the list if its total revenue is high enough. This is an important distinction because revenue measures the sheer scale of a company’s operations, while profit measures what’s left after expenses. Massive retailers and energy companies, for example, often top the list because they move enormous volumes of goods even if their profit margins are relatively thin.
The revenue threshold to land the 500th spot shifts every year as the economy grows and companies get larger. The company ranked number one typically brings in several hundred billion dollars in annual revenue, while the company at position 500 earns a fraction of that but still operates at a scale most businesses never reach.
What It Means in Practice
Being called a “Fortune 500 company” carries real weight in the business world. It signals that a company is among the largest and most established in the country. Job seekers often use it as shorthand for a major employer with extensive resources, structured career paths, and competitive benefits. Investors, suppliers, and partners view a Fortune 500 listing as a sign of financial scale and stability.
You’ll frequently see the term in job postings (“Fortune 500 experience preferred”), in company marketing materials, and in news coverage. It functions as a quick credibility marker. If someone says they worked at a Fortune 500 company, the listener immediately understands the person worked at a very large, well-known organization, even without knowing the specific company name.
Fortune 500 vs. Fortune Global 500
The standard Fortune 500 only includes companies based in the United States. Fortune also publishes a separate list called the Fortune Global 500, which ranks the 500 largest companies worldwide by revenue regardless of where they’re headquartered. A multinational corporation based in Japan or Germany could appear on the Global 500 but would not qualify for the U.S.-focused Fortune 500. Many of the biggest American companies appear on both lists.
Fortune 500 vs. S&P 500
These two lists sound similar but serve completely different purposes. The Fortune 500 is a magazine ranking based on revenue. The S&P 500 is a stock market index, maintained by S&P Global, that tracks 500 large publicly traded companies based primarily on market capitalization (the total value of a company’s outstanding shares). Investors use the S&P 500 as a benchmark to measure how the stock market is performing overall, and many index funds are built to mirror it.
The selection criteria also differ. The S&P 500 committee evaluates companies on several factors beyond just size, including how easily shares can be bought and sold (liquidity), how long the company has been publicly traded, and whether it’s financially viable. Private companies are excluded entirely from the S&P 500 because their stock doesn’t trade on an exchange. A large private company like a family-owned conglomerate could rank high on the Fortune 500 by revenue but would never appear in the S&P 500.
There’s significant overlap between the two lists since many of the country’s biggest revenue generators are also among its most valuable publicly traded companies. But the overlap isn’t complete, and confusing the two is a common mistake. One measures how much money companies bring in. The other measures how much investors think companies are worth.
Why the List Changes Every Year
The Fortune 500 is not a fixed club. Companies move up, drop down, or fall off the list entirely based on their revenue performance relative to other large companies. A company that grows rapidly through acquisitions or a boom in its industry can jump dozens of spots in a single year. A company hit by declining sales, a shrinking market, or a major restructuring can slide off the bottom of the list.
New entrants often include fast-growing technology firms, recently merged companies that combined their revenue streams, or companies that went from private to public and began reporting financials more transparently. Meanwhile, companies that split into smaller units, get acquired, or simply shrink may disappear from the ranking. The turnover on the list over any 10- or 20-year period is surprisingly high, reflecting how quickly the competitive landscape shifts in the American economy.