S&P 500: Top 10 accounts for 40-42% of market capitalisation

The ten largest companies in the S&P 500 now account for around 40 to 42 percent of the index's total market capitalisation. This concentration is significantly higher than the previous record during the dot-com bubble in 2000, when the top 10 accounted for 29 percent. The share of the heavyweights is thus 13 percentage points higher than at the turn of the millennium.

Historical comparison shows dramatic rise

The current concentration of the S&P 500 among a few heavyweights has reached historic proportions. In 1990, the ten largest companies – including IBM, Exxon, General Electric and Philip Morris – accounted for around 19 percent of the index. In 2015 and 2016, the share was around 20 percent. Between 2020 and 2025, concentration increased by around 10 percentage points, reaching a new all-time high.

Just three companies – Nvidia, Apple and Microsoft – represent nearly a quarter of total market capitalisation. The trend towards higher concentration may have begun as early as 2014 to 2016, before the recent enthusiasm for artificial intelligence.

The Magnificent Seven as driver

Since the first quarter of 2023, seven major technology companies have shown striking outperformance: Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla. The trigger was the release of ChatGPT in late 2022 and the ensuing euphoria around generative artificial intelligence. Due to their high index weighting, these companies significantly amplified the performance of the entire S&P 500.

The top 20 companies in the S&P 500 achieved revenue growth of 10.5 percent in the past year – almost twice as high as the 8 percent of the remaining 480 companies. Of these 20 companies, 15 have broad economic moats, characterised by network effects, intangible assets, cost advantages, high switching costs or efficient scaling.

Risks of concentration

The heavy weighting of few securities presents multiple risks for investors. The S&P 500 no longer offers the broad diversification across corporate growth that it has historically provided. Instead, the index's performance today depends more heavily on a small group of technology-oriented large corporations whose future growth is closely tied to developments in artificial intelligence.

When the top 10 stocks correct, this has disproportionate effects on the overall index. In August 2025, this vulnerability became apparent: following an MIT report indicating that company-wide AI pilot projects have not yet translated into revenue growth, mega-caps came under pressure. As a result, the equal-weighted S&P 500 outperformed the market-capitalisation-weighted version. This example illustrates how the dominance of a few stocks makes investors vulnerable to sudden sentiment shifts.

Market capitalisation versus equal weighting

The difference between the market-capitalisation-weighted S&P 500 and the equal-weighted variant – in which each company comprises around 0.2 percent of the index with regular rebalancing – has widened significantly in recent years. The market-capitalisation-weighted version has performed considerably better, highlighting the disproportionate influence of the largest positions.

When the ten largest companies represent 40 percent of the index, their weight equals that of 200 average-weighted securities in an equal-weighted variant. The remaining 490 companies share the remaining 60 percent of market capitalisation.

Shift in market leadership

Data on the largest 20 S&P 500 companies by market capitalisation from 1989 to 2026 show how the index's leadership has changed over time. While industrial and energy companies dominated three decades ago, today it is technology-driven corporations that dominate the proceedings.