Tech Giants and AI Enthusiasm is Fueling a Large Cap Stock Boom

What We're Showing

This chart shows the top 40 stocks as a percentage of the S&P 500's market cap. This data comes from Ned Davis Research, reported by Reuters Breakingviews.

In short, this data highlights points in time when the S&P 500 becomes "top heavy". This means that the largest few stocks in the index make up a large share of the total value.

Key Takeaways

• In modern history, there have been two other noteworthy large cap booms, both of which were followed by a crash
• The first large cap boom took place in the early 1970s, as a small group of large, established companies (the Nifty Fifty) became extremely popular with investors
• The next boom took place during the late '90s Dot Com era as investor excitement about the potential of the internet caused a surge in tech stocks
• Today, a similar boom is taking place, largely buoyed by the promise of artificial intelligence. A number of mega-cap companies have hit new valuation milestones. Amazon is the most recent, surpassing $2 trillion in market cap for the first time