Big Tech’s market dominance is reaching new extremes

The U.S. stock market is becoming increasingly reliant on a handful of tech giants — including Nvidia, Apple, Microsoft, Meta, and Alphabet — which now account for most of the S&P 500’s growth. Smaller firms, even those with AI ties, have delivered much weaker returns.

Source Financial Times

Analysts say this new phase of market concentration began with the launch of ChatGPT in 2022, sparking massive investor enthusiasm for artificial intelligence. AI-linked stocks have surged more than 160% since then, compared to just 25% for non-AI companies.

Experts warn, however, that the market’s narrow focus makes it vulnerable. If one of these dominant firms stumbles, the entire index could follow. Some investors are already rotating toward cheaper sectors such as energy and industrials to reduce exposure to Big Tech volatility.