The Commonwealth Bank of Australia (ASX: CBA) share price is outperforming the BHP Group Ltd (ASX: BHP) share price today, tightening the race that has some market watchers on the edge of their seats.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed Friday trading for $127.68. At time of writing on Monday, shares are changing hands for $127.69 apiece, up a very slender 0.01%.
As for BHP, shares in the ASX 200 mining giant closed Friday at $42.78 and are currently trading for $42.485, down 0.69%.
For some context, the ASX 200 is down 0.6% at this same time as well.
Here's why the relative performance between the two ASX 200 goliaths matters.
Soaring CBA share price could upend ASX leader
At the current CBA share price, Australia's biggest bank has a market cap of approximately $214.0 billion.
Despite that very impressive figure, CommBank still comes in second to BHP. With a market cap of approximately $216.7 billion, the iron ore miner remains the biggest stock on the ASX.
BHP has held that crown since November 2021. That's when it sailed past CBA as the iron ore price rocketed above US$200 per tonne.
But that could be about to change once more.
CBA has joined in the broader bank stock rally over the past year, defying a chorus of bearish analyst forecasts. That rally sees the CBA share price up more than 30% in 12 months.
The BHP share price, meanwhile, has gone the other direction. Investors have sold down the miner amid a retrace in iron ore prices and further weakness forecast in the year ahead as China's economy continues to sputter along in low gear. This sees the BHP share price down more than 4% in 12 months.
Should CBA stock continue to outpace BHP stock in the days ahead, we could see CommBank retake the biggest ASX stock title for the first time in almost three years.
Expert commentary
Commenting on the blistering rally in the CBA share price, and bank stocks in general, UBS analyst John Storey said (quoted by The Australian Financial Review), "The reason and narrative behind the bank rally is now fundamentally different to what initially sparked it in November."
Storey explained:
Overall, clients think the impending tax cuts will provide further relief to consumers, while low unemployment numbers, and rising property prices, mean the credit cycle is turning out to be far more benign than initially feared.
Clients see few catalysts on the horizon which could fundamentally derate these stocks from here, outside of valuation.
