The top five companies in the powerful S&P 500 index are all tech companies – by a wide margin.
Apple, Amazon, Alphabet, Microsoft and Facebook all account for just under 20 percent of the market value for the entire S&P 500. With a collective value of nearly $5 trillion, these top tech companies easily dwarf other entire industries in the index, with companies like Berkshire Hathaway and JPMorgan Chase falling well short. Currently, the total valuation of the S&P 500 is almost $27 trillion.
The value of these tech companies has rapidly grown over the past couple of years, with Apple, Amazon, Alphabet and Microsoft all surpassing $1 trillion valuations at some point in the last two years. Many point to the tech industry’s top-heavy influence on the S&P 500 as a potential detriment to investors, who may not be getting as diversified a portfolio as they think when investing in the index.