Updated

Updated · Yahoo Finance · Sep 24

Apple, Nvidia Command Over 15% of S&P 500 as Record Concentration Tops Dot-Com Peak

Updated

Updated · Yahoo Finance · Sep 24

Apple, Nvidia Command Over 15% of S&P 500 as Record Concentration Tops Dot-Com Peak

Q: If Apple and Nvidia now drive over 15% of the S&P 500, how diversified is a passive index fund really?

A passive S&P 500 fund is still diversified by number of holdings, but it is no longer especially diversified by portfolio weight or by what drives returns. If Apple and Nvidia alone account for more than 15% of the index, and the top 10 stocks are near 40%, investors are making a much bigger bet on a handful of mega-cap companies than many realize. That is a feature of market-cap weighting, not a flaw unique to any one fund. Cap-weighted index funds automatically put more money into the biggest companies, so when a small group surges, their influence over the fund rises with it. In practical terms, broad ownership of 500 companies can still mean performance is dominated by a few names. Recent fund breakdowns show roughly 7.5% in Nvidia and about 6.6% in Apple alone. The bigger issue is that the concentration is not just stock-specific but thematic. Many of the largest holdings are tied to the same AI and mega-tech earnings story. That means investors may have less true diversification than the label “S&P 500” suggests, because different holdings can still rise and fall on the same economic driver. None of this means passive index funds have stopped being useful. They remain low-cost, liquid, and self-rebalancing over time. But they are less neutral than many investors assume. Anyone relying heavily on an S&P 500 fund for diversification may want to review exposure to equal-weight U.S. funds, mid-caps, small-caps, international stocks, or bonds to reduce concentration risk.

3 articles · Updated · Yahoo Finance · Sep 24

Apple and Nvidia now make up more than 15% of the S&P 500, the highest two-stock concentration ever recorded in the index.
That share exceeds the 9.1% peak once held by Microsoft and General Electric before the dot-com bust, underscoring how heavily the benchmark now depends on two companies.
Apple hit a record $345 on Tuesday and remains up 25% this year after unveiling the iPhone 18 and foldable Duo earlier this month.
Nvidia has gained 21% year to date after saying late in August that revenue should grow at least 70% next fiscal year, with CEO Jensen Huang saying supply limits are the main brake.