From 20% two years ago, the "Magnificent Seven"—Apple (AAPL, Financials), Nvidia (NVDA, Financials), Microsoft (MSFT, Financials), Amazon (AMZN, Financials), Alphabet (GOOGL, Financials), Meta Platforms (META, Financials), and Tesla (TSLA, Financials)—now account for one-third of the S&P 500 Index. With 63% average gains over 2024, these seven tech behemoths accounted for more than half of the gains on the S&P 500.
Market value surged shockingly for Nvidia, rising to $3.28 trillion by 2024. With a market capitalization of almost $4 trillion, sales and strategic stock buybacks helped Apple remain the most valuable company in the world. Record sales by Microsoft confirmed its technological leadership.
These companies' increasing dominance begs market concentration issues even with their remarkable performance. Double their share in five years, Magnificent Seven broke record 33% of the S&P 500 with $18 trillion market capitalization. Concentration has sparked questions on the dangers of a highly weighted index.
The Invesco S&P 500 Equal Weight ETF appeals to investors looking for a more balanced S&P 500 exposure since it diversifies index performance and gives all components equal weight. These top companies will keep impacting investment strategies and market analysis as the technology sector expands.
