Sep 28, 2020 - Economy
Big Tech's share of the S&P 500 reached record level in August
Add Axios as your preferred source to
see more of our stories on Google.
The gap between the weighting of the five largest companies in the S&P 500 and the 300 smallest rose to the highest ever at the end of August, according to data from the Leuthold Group.
Why it matters: The concentration of wealth in a few massive U.S. tech companies has reached a scale significantly greater than it was before the dot-com bubble burst.
- In August, five companies — Apple, Microsoft, Amazon, Facebook and Alphabet — held a share of the S&P 500 that was 9% greater by market cap than the index's 300 smallest companies. This was a record amount.
What they're saying: "These trillion-dollar tech juggernauts have boosted their market-cap weight in 11 of the past 12 months — zooming from 15.8% of the S&P 500 last September, to 23.9% in August," Phil Segner, a Leuthold Group research analyst, said in a recent note to clients.
- "What’s even more remarkable is that this trend has persisted during a 33% downdraft and a 60% updraft. September’s relative wobble in the 'Top 5' has trimmed its weight back to 21.7%, which is the largest month-to-month decline since 2000."
- "Even with the trim, the current weight of the S&P 500’s Top 5 is still well above the Tech Bubble’s high of 18.1%."
