{"id":19214,"date":"2023-06-07T01:23:26","date_gmt":"2023-06-07T05:23:26","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/big-techs-added-bulk-in-sp-500-in-2023-outweighs-indexs-energy-sector-datatrek-says\/"},"modified":"2023-06-07T01:23:27","modified_gmt":"2023-06-07T05:23:27","slug":"big-techs-added-bulk-in-sp-500-in-2023-outweighs-indexs-energy-sector-datatrek-says","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=19214","title":{"rendered":"Big Tech\u2019s added bulk in S&P 500 in 2023 outweighs index\u2019s energy sector, DataTrek says"},"content":{"rendered":"
\n

Big Tech\u2019s market value in the S&P 500 index has surged to more than a quarter of the index, with just seven stocks this year adding heft larger than the weight of its entire energy sector, according to DataTrek Research.<\/p>\n

Companies known as Big Tech, including Apple Inc.
\n AAPL,
\n -0.21%<\/bg-quote>,<\/span>
\n Microsoft Corp.
\n MSFT,
\n -0.67%<\/bg-quote>,<\/span>
\n Google parent Alphabet Inc.
\n GOOG,
\n +1.01%<\/bg-quote>,<\/span>
\n Amazon.com Inc.
\n AMZN,
\n +1.05%<\/bg-quote>,<\/span>
\n Nvidia Corp.
\n NVDA,
\n -1.32%<\/bg-quote>,<\/span>
\n Facebook parent Meta Platforms Inc.
\n META,
\n -0.10%<\/bg-quote>
\n and Tesla Inc.
\n TSLA,
\n +1.70%<\/bg-quote>,<\/span>
\n now represent 27.4% of the S&P 500 after soaring in 2023, a DataTrek note Tuesday shows.<\/p>\n

\n

These \u201cseven stocks are just over a quarter of the S&P after starting the year as one-fifth of the index,\u201d Nicholas Colas, co-founder of DataTrek, wrote in the note. \u201cOne might have convincingly argued that even 20 percent was too high a weighting, but that has not stopped this cohort from gobbling up even more S&P 500 \u2018market share\u2019.\u201d<\/p>\n

Big Tech has \u201cgained 7.4 points of S&P 500 weighting\u201d in 2023, exceeding the weighting of the index\u2019s entire large-cap energy sector, according to the note. The energy sector weighs in at 4.2% of the S&P 500. <\/p>\n

Meanwhile, the amount of Big Tech\u2019s added weight this year is also about triple the 2.5% the materials sector represents in the index, said Colas.<\/p>\n

Shares of Big Tech companies have skyrocketed this year against \u201can otherwise standstill U.S. equity market,\u201d driving the S&P 500\u2019s gains, according to the note. The index, which is a gauge of large-cap stocks in the U.S., has climbed 11.6% this year through Tuesday.\u00a0<\/p>\n

The S&P 500
\n SPX,
\n +0.24%<\/bg-quote>
\n closed slightly higher Tuesday, remaining on the cusp of breaking out of its bear market as the index is nearly 20% above its closing low last year in October.\u00a0<\/p>\n

Read:<\/strong> Why the broader U.S. stock market has \u2018a lot riding\u2019 on Big Tech earnings<\/p>\n

\u201cThere\u2019s nothing inherently wrong with a market that chooses to only reward some combination of cost cutting and new technology, but it is far from either the norm or the ideal setup,\u201d said Colas.\u00a0<\/p>\n

While the rest of the S&P 500 may be starting to benefit from \u201cstabilizing\u201d expectations for company earnings against the backdrop of still \u201creasonably strong\u201d economic growth, as well as from \u201cincremental clarity\u201d over the past few weeks on the debt ceiling and the Federal Reserve\u2019s upcoming policy meetings this month and July, \u201cwe will want to see more proof before being convinced of its permanence.\u201d<\/p>\n

Seven of the S&P 500\u2019s 11 sectors rose Tuesday, with financials posting the strongest performance with a sharp gain of 1.3%, according to FactSet data.<\/p>\n

While Big Tech is trading at an average 44.2x the group\u2019s forward 12-month earnings, the S&P 500\u2019s much smaller energy sector trades for 10x forward earnings while the materials sector is valued at 15.8x, according to DataTrek.\u00a0<\/p>\n

Big Tech valuations are \u201chigh,\u201d said Colas, with Apple, Microsoft and Alphabet and Meta being \u201csomewhat high\u201d while Amazon, Nvidia and Tesla are \u201cextremely high.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Big Tech\u2019s market value in the S&P 500 index has surged to more than a quarter of the index, with just seven stocks this year adding heft larger than the weight of its entire energy sector, according to DataTrek Research. Companies known as Big Tech, including Apple Inc. AAPL, -0.21%, Microsoft Corp. MSFT, -0.67%, Google […]<\/p>\n","protected":false},"author":1,"featured_media":19215,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-19214","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBig Tech\u2019s added bulk in S&P 500 in 2023 outweighs index\u2019s energy sector, DataTrek says | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Big Tech\u2019s market value in the S&P 500 index has surged to more than a quarter of the index, with just seven stocks this year adding heft larger than\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=19214\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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