Nvidia, along with 5 other tech giants, now holds a massive 30 per cent share of the S&P 500 index. This comes as tech giants are increasingly gaining investor interest largely resulting from AI (Artificial intelligence) hype.
At the beginning of 2024, Apple, Microsoft, Amazon, Meta, Google's parent company Alphabet and Nvidia's collectively made up around 26 per cent of the S&P index.
The increase in market cap has largely been driven by Wall Street's favorite tech stock, Nvidia. The tech giant, known for its GPUs (graphics processing units) rose by nearly 20 per cent following optimistic sales projections as spending on artificial intelligence computing remains robust.
This surge has pushed the chipmaker's market value by $1.6 trillion in the current year, bringing it closer to surpassing Apple which stands as the second-most valuable company in the world.
Historically, large companies have always held considerable sway in the S&P 500 but to the current levels, as per a report by Bloomberg. For the majority of the last thirty years, the six largest stocks in the index held small weightings. But in 2020, the influence of these stocks started gaining momentum and grew over 20 per cent.
As AI continues to thrive and paints a clearer picture of the technology centered around it, the momentum in the stocks of all 6 six tech giants is expected to remain strong.
The report also highlighted a change in the market landscape by drawing a comparison with the peak observed in 2000 during the dot-com bubble. At that time, only three out of the six largest companies were in the technology sector, namely Microsoft, Cisco Systems and Intel Corp. The remaining trio comprised General Electric Co., Exxon Mobil Corp., and Walmart Inc.
