If you don't own literally a handful of S&P 500 stocks, you're missing out of this year's rally big time.
Just five S&P 500 stocks, including Apple, Microsoft, Nvidia, Meta Platforms and Alphabet, contributed $1.7 trillion in market capitalization this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a whopping 66% of the total $2.5 trillion in value added to the entire market this year.
Such a top-heavy S&P 500 is starting to attract concern.
"Portfolios lacking concentrated positions in just a handful of the largest tech stocks may be lagging this year," said Mike Dickson, head of research at Horizon Investments, pointing out tech stocks are pulling ahead this year by the most since the 1999 bubble. "Given how top-heavy this current market environment is, outperformance in diversified portfolios has been hard to come by so far in 2023."
Big Five Powering The S&P 500
Here's a stat to drive home just how much these five stocks have hijacked the S&P 500. Despite fueling 66% of the market's gains this year, these five stocks account for just 20% of the market's total value.
Talk about punching over its weight. Shares of Apple are up more than 27% this year. That's added more than a half trillion dollars of market value to its investors' portfolios, or nearly 22% of the S&P 500's total gain. And that's despite only being 7% of the market's total value.
It's a similar story with Microsoft. The software company only accounts for 5.8% of the S&P 500's total value. And yet, by jumping nearly 20% this year, it's added more than 13% of the S&P 500's total gains this year.
And even more head-turning is Nvidia. The maker of high-end computer chips is up 83% this year. That added nearly $300 billion in market value this year, or 11.8% of the S&P 500's total rise this year. Not bad for a company only worth less than 2% of the S&P 500's total value.
If you're not going to own many stocks, these are the ones you definitely hope you owned this year.
Top S&P 500 Value Contributors This Year
| Company | Ticker | % of S&P 500's 2023 gain so far | Sector |
|---|---|---|---|
| Apple | 21.5% | Information Technology | |
| Microsoft | 13.4% | Information Technology | |
| NVIDIA | 11.8% | Information Technology | |
| Meta Platforms | 10.1% | Communication Services | |
| Alphabet | 9.8% | Communication Services |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
