Giant technology companies have grown so large that they now dominate the S&P 500, and that is changing how some investors think about index funds.
As of mid-2026, the 10 biggest companies make up about 40 percent of the entire index, the largest share on record, according to S&P Dow Jones Indices. Just seven of them, nicknamed the "Magnificent Seven" — Apple, Microsoft, Nvidia, Amazon, Alphabet (Google), Meta (Facebook), and Tesla — account for roughly a third. Nvidia alone is around 12 percent of the index.
That means about 40 cents of every dollar in that broad fund rides on 10 stocks. The other 490 companies split the rest.
So far, that has paid off. According to InvestmentNews, those seven giants returned about 27 percent in 2025, well ahead of the index's roughly 16 percent, and they have powered much of the market's climb for years.
Still, owning an S&P 500 fund may leave you less diversified than you think. As Nick Ruder, investment chief at Kathmere Capital, told CNBC, investors should "make sure the portfolios are sufficiently diversified outside the mega-cap growth segment."
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.
