California falls behind Texas in Fortune 500 ranking
Texas has dethroned California as the state with the most companies in the Fortune 500.
The Fortune 500 list ranks the largest U.S. companies by revenue. This year, 57 of the top companies are headquartered in Texas, compared to 56 in California. This is a reversal from two years ago when Golden State was in pole position.
The Lone Star State was quick to declare victory.
“Texas is the undisputed center of headquarters,” said Texas Governor Greg Abbott. he said in a news release responding to the rankings. It was announced on Wednesday. “The world’s leading businesses invest in Texas with confidence because of our welcoming business climate, predictable regulatory environment, and skilled and growing workforce. People and businesses choose Texas because Texas works.”
California’s corporate haters say they’re trying to avoid the state’s high costs, income taxes and strict regulations, but the western state remains one of the top moneymakers.
“California dominates nearly every other measure: Fortune 500 companies are the most profitable ($647 billion), the most valuable ($20 trillion) and employ more people than any other state (2.8 million workers),” Fortune said in a news release.
Indeed, despite the naysayers, California companies are leading the world in developing the latest advances in space and defense technologies, as well as artificial intelligence technology.
The state is home to nearly 400 “unicorns,” or billion-dollar startups, more than any other state, according to CB Insights. It also gobbled up nearly two-thirds of U.S. venture capital last year, with San Francisco Bay Area startups like OpenAI leading the way, according to business information platform Crunchbase.
Texas and California are in contention for the crown. Inside 2024Ten years later, California topped the list with 57 companies, while Texas and New York were in second place with 52 each.
Healthcare giant McKesson and oil companies Exxon Mobil and Chevron were the first three Texas companies on the list. Apple, Alphabet and Nvidia took the top spot in California.
Tesla, which moved from Palo Alto to Austin in 2021, ranked 43rd on the list. Other major Fortune 500 companies leaving California include SeerCharles Schwab and Chevron.
California’s population migration has yet to fully recover from the pandemic times of 2020. The state’s high cost of living and regulatory environment are often cited as reasons why residents choose to move.
California’s recent proposal to impose a one-time tax on billionaires has led some, including Peter Thiel and Larry Page, to open new offices outside the state.
Some smaller companies are also leaving the state, but nearly the same number are being established. From 2011 to 2021, the state lost a net 2% of its nearly 47,000 headquarters. Public Policy Institute of California.
“There are some signs of an increase in the number of headquarters leaving California, but it’s really small compared to other firm trends,” said Sarah E. Bohn, vice president of the Public Policy Institute of California. “The turnover rate is slightly higher in large companies.”
Bohn warned in a recent report that focusing solely on relocation misses the range of positive and negative forces driving headquarters operations and may misrepresent businesses’ desire and ability to operate headquarters in California and its broader impact on employment.
Behind Texas and California was New York, home to 53 Fortune 500 companies this year. In fourth place are Illinois and Ohio, with 29 companies each.
Amazon was the top company on the list, ending Walmart’s 13-year reign atop the annual list of Fortune 500 companies. Amazon’s 2025 revenue was $716.9 billion compared to Walmart’s $713.2 billion.
Amazon, headquartered in Seattle, joins Exxon Mobil, General Motors and Walmart as the only four companies to hold the top spot since Fortune began publishing the data in 1955.
The 500 companies on the list generated $21 trillion in revenue and $2.1 trillion in profits last year, employing 30.5 million people worldwide.
