What are the largest tech stocks in the S&P 500?
The focus remains on the "Magnificent Seven" companies, a term coined by Bank of America analyst Michael Hartnett to describe the seven largest tech-focused companies in the S&P 500 -- Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla. Combined, they make up 28.8% of the index.
While the S&P 500 rose more than 24% in 2023, the Magnificent Seven big tech stocks— Apple , Amazon , Alphabet , Meta Platforms , Microsoft , Nvidia , and Tesla —did much of the heavy lifting . Nvidia and Meta were the index's top two performers, while Tesla rounded out the top 10.
| # | Company | Symbol |
|---|---|---|
| 1 | Microsoft Corp | MSFT |
| 2 | Apple Inc. | AAPL |
| 3 | Nvidia Corp | NVDA |
| 4 | Amazon.com Inc | AMZN |
The Magnificent Seven stocks are a group of high-performing and influential companies in the U.S. stock market: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla.
- Apple Inc. Symbol. AAPL. Sector* Information Technology.
- Microsoft Corp. Symbol. MSFT. Sector* ...
- Nvidia Corp. Symbol. NVDA. Sector* ...
- Broadcom Inc. Symbol. AVGO. Sector* ...
- Adobe Inc. Symbol. ADBE. Sector* ...
- Salesforce, Inc. Symbol. CRM. Sector* ...
- Advanced Micro Devices. Symbol. AMD. Sector* ...
- Accenture plc A. Symbol. ACN. Sector*
The S&P 500 got a makeover
Well, the valuation expansion of tech stocks has made the tech sector a staggering 28.9% of the S&P 500. But if you add in Amazon, Alphabet, Meta Platforms, and Tesla -- which again aren't in the tech sector -- then the weight is actually 39.8%. Data source: Vanguard.
The seven tech stars— Tesla, Nvidia, Meta Platforms, Alphabet, Microsoft, Apple, and Amazon.com —accounted for $463 billion of that gain, leaving just $125 billion for the other 493 companies in the index. Big Tech's run has helped push the S&P 500 up about 2% this year.
S&P 500 MVP: Nvidia
Semiconductor stocks were the main beneficiaries of the tech resurgence and AI explosion in 2023, and Nvidia NVDA is the top dog of the semi world. Considered most preferred by datacenter operators, Nvidia's GPUs are likely to help the company grab a larger market space.
| Company/Ticker | Price/Fair Value | Fair Value Uncertainty |
|---|---|---|
| Cognizant Technology Solutions CTSH | 0.80 | Medium |
| Snowflake SNOW | 0.86 | Very High |
| Teradyne TER | 0.64 | High |
Buffett's favorite ETF
portfolio: the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard 500 Index Fund ETF (NYSEMKT: VOO). Both are index ETFs that track the S&P 500. Which of these two funds is Buffett's favorite? I think the evidence points to the Vanguard 500 Index Fund ETF.
What is the best performing stock in the S&P 500?
| Rank | Company | 20 Year Return |
|---|---|---|
| 1 | Apple | 59,918% |
| 2 | Monster Beverage | 59,299% |
| 3 | NVIDIA | 28,712% |
| 4 | Intuitive Surgical | 18,221% |
| Company | Sector | 5 Year Total Return |
|---|---|---|
| Quanta Services (PWR) | 🏭 Industrials | 445% |
| Eli Lilly and Co (LLY) | 🚑 Health Care | 440% |
| Axon Enterprise (AXON) | 🏭 Industrials | 429% |
| Palo Alto Networks (PANW) | 🖥️ Information Technology | 412% |
- The Best Tech Stocks of January 2024.
- Apple Inc. ( AAPL)
- Microsoft Corporation (MSFT)
- Alphabet Inc. ( GOOGL)
- NVIDIA (NVDA)
- Meta Platforms Inc. ( FB)
- Broadcom Inc. ( AVGO)
- Taiwan Semiconductor Manufacturing Company (TSM)
The best tech stocks based on one-year performance include NVIDIA and Broadcom. Sabrina Parys is a content management specialist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes.
| Company and ticker symbol | Performance in 2023 |
|---|---|
| NVIDIA (NVDA) | 238.9% |
| Advanced Micro Devices (AMD) | 127.6% |
| Palo Alto Networks (PANW) | 111.3% |
| Broadcom (AVGO) | 99.6% |
- Apple Inc. Symbol. AAPL. Sector* Information Technology.
- Microsoft Corp. Symbol. MSFT. Sector* ...
- Amazon.com Inc. Symbol. AMZN. Sector* ...
- Nvidia Corp. Symbol. NVDA. Sector* ...
- Alphabet Inc A. Symbol. GOOGL. Sector* ...
- Meta Platforms, Inc. Class A. Symbol. META. ...
- Alphabet Inc C. Symbol. GOOG. Sector* ...
- Tesla, Inc. Symbol. TSLA. Sector*
Information technology stocks currently represent the largest sector of the benchmark S&P 500 Index, comprising just under 29% of the index's value. When you add in communications services stocks, many of which connect with the technology arena, the group represents more than 37% of the S&P 500.
Shifting gears to focus on the individual components of the S&P 500 index, its five largest constituent firms in terms of market capitalization are Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA).
Companies' values are often measured by market capitalization or the value of all of the shares in the market. Microsoft, Apple, and Saudi Aramco are the top three global companies, each with market caps exceeding $2 trillion. Technology and energy companies rank among the most valuable companies in the world today.
- Technology. Technology is the largest sector of the S&P 500. ...
- Health Care. The next largest of the S&P sectors is health care. ...
- Financials. The financials sector covers a variety of industries, including banking and investing. ...
- Real Estate. ...
- Energy. ...
- Materials. ...
- Consumer Discretionary. ...
- Industrials.
How much would I make if I invested in S&P 500?
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2022, had an annual compounded rate of return of 12.6%, including reinvestment of dividends.
- Fidelity 500 Index Fund (NASDAQMUTUALFUND:FXAI. X)
- Schwab S&P 500 Index Fund (NASDAQMUTUALFUND:SWPP. X)
- Vanguard 500 Index Fund Admiral Shares (NASDAQMUTUALFUND:VFIA. X)
The Magnificent Seven stocks — Amazon.com (AMZN), Apple (AAPL), Google parent Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) are closing out a huge year, all easily beating the S&P 500 index.
| ETF | Ticker | Annualized 5-year return |
|---|---|---|
| Vanguard S&P 500 ETF | VOO | 15.65% |
| iShares Core S&P 500 ETF | IVV | 12.48% |
| SPDR S&P 500 ETF Trust | SPY | 12.36% |
On top of that, several REITs have specific factors that could power additional upside. Prologis (NYSE: PLD), Mid-America Apartment Communities (NYSE: MAA), and EPR Properties (NYSE: EPR) stand out for their potential to soar in 2024 and beyond.
