🚨 The S&P 500 is up 12.2% this year…but that number is hiding something investors need to see. The top 10 stocks in the index have contributed roughly 12.4% of return based on their index weights and year-to-date performance. Read that again. The entire S&P 500 +12.2%... Contribution from just the top 10 +12.4% 📈 Micron alone $MU with its 273% return has pushed the entire market up 4.97% (company's index weight (1.82%) times ytd return) $AMD accounts for another 2.76% $NVDA pushed the market up 1.8% $AAPL 1.54% $MSFT 0.3% $META 0.29% $GOOGL /GOOG 0.45% $AMZN 0.25% $AVGO 0.07% That means the other 490 stocks, collectively, have contributed essentially NOTHING—or slightly detracted—from the index’s return. And there’s an even bigger risk hiding underneath the numbers. Look at those top performers. 🤖 The market isn’t just concentrated in a handful of stocks. It’s concentrated in ONE investment theme: AI That doesn’t mean AI is a bubble or these companies are bad investments. But it does mean the headline S&P 500 return may be giving investors a misleading picture of the health beneath the surface. When a handful of stocks are doing nearly all the heavy lifting, there’s a lot less margin for error. ⚠️ If the AI trade keeps working, the index can keep climbing. But if earnings disappoint, AI spending slows, or investors simply decide these valuations have gone too far, weakness in a few enormous companies could overwhelm strength elsewhere. 500 stocks. Ten carrying the market. One dominant theme. 👀 That’s not something I’d ignore. Updating in this week's Sunday Market Outlook video! https://www.youtube.com/playlist?list=PLjsZ3KrTlZoxw6oAdIvEHaETjtZRZkzSi In the meantime, watch this video to know exactly WHEN to start worrying about AI stocks and a crash https://youtu.be/b3WxJqt2ck8
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6 Comments
Robb Benedict@robb.b · 19d
Man, when the AI valuations come back to earth, trillions are going to vanish. 😂
Cheung Lau@lovenancy82 · 22d
ASTS what do you think?
Kevin Vega@investkcapital · 17d
As long as the fundamentals of those companies hold strong then there is nothing to worry about long term
Jesse Franklin@pinnaclewealth · 22d
Look at the MMFI and $RSP/ $SPY divergence breadth is thin
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