Nvidia and Apple’s 15% grip on the S&P 500: Does this threaten the index’s very essence?

​Nvidia and Apple have reached a combined weighting of over 15% in the S&P 500. This level of concentration far exceeds the previous peak of 9.1% held by Microsoft and General Electric before the dot-com crash. As two technology giants dictate the performance of a benchmark designed to reflect 500 large U.S. companies, does this concentration threaten the essence of the S&P 500 as a diversified market index?

The numbers behind the dominance

According to holdings data from the SPDR S&P 500 ETF as of late September 2026, Nvidia constituted approximately 8.2% of the index, while Apple held about 7.4%. That accounts for a combined figure above 15%. Creative Planning President Peter Mallouk has stressed the significance of this market situation, stating that “the S&P 500 has never been more concentrated in just two stocks than it is today, with Nvidia and Apple representing over 15% of the index.” 

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A decade earlier, the top 10 companies accounted for no more than 17-20% of the index. Today that figure has reached an unprecedented 39-40%. These weights fluctuate with share prices, but the overall trend remains consistent. Nvidia’s market capitalization has stabilized above $5 trillion due to the high AI demand, and Apple’s valuation also shows a consistent rise. As a result, the two top companies now exert more influence than hundreds of other big firms combined.

How market-cap weighting supported the trend

The S&P 500 is a free-float market-capitalization-weighted index. This means that larger companies automatically receive greater representation, but the overall number of 500 major companies is expected to provide sufficient diversification in any case. As Nvidia's and Apple’s valuations increased, their weights rose proportionally. Moreover, trillions directed into S&P 500 funds are allocated according to companies’ weights. So the top of the list receives higher benefits.

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This self-reinforcing pattern differs from equal-weighted approaches. Charlie Bilello, chief market strategist at Creative Planning, has analyzed the concentration dynamics through charts. His results show that the present situation has no clear similarities in history. At present, many traditional investors tend to become overexposed to a small number of technology companies without fully comprehending the risks involved. 

Implications for passive investors

For investors who own the S&P 500 through low-cost funds, more than 15 cents of every dollar is now allocated to just two companies. Financial advisor Wes Moss has specified the problem as follows: “your S&P 500 is not that diversified anymore… 35 to 40% of the movement of that fund is in only 7, 8, 9, or 10 stocks. So it’s technically, it’s really not that diversified.” A small number of mega corporations generate the majority of returns, thus distorting the market.

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When these leaders advance, the index rises even if the broader market is mixed. Similarly, when top stocks reverse, the opposite occurs. This situation negatively affects those investors who traditionally prefer lower market risks. Some financial advisors are offering equal-weighted alternatives or other strategies that reduce dependence on the largest companies.

Historical parallels and current risks

Historical patterns demonstrate the high likelihood of a new financial crisis in the following months. Before the early-2000s technology collapse, the two top stocks never reached today’s combined weight. Mallouk and others have noted that Microsoft and General Electric together represented only 9.1% heading into that bust. So the current 15%+ level for Nvidia and Apple implies even greater risks without clear hedge options available.

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In the short term, stronger fundamentals seem to support the leaders’ growth. Nvidia’s earnings growth is related to AI infrastructure expansion, while Apple is successful in maintaining consistent cash generation. However, structural risks remain, as any external shock affecting one of these companies may immediately spread to other sectors and industries. 

What this means for the index’s identity

The current market trends, passive capital flows, and the advantages of scale favor the largest players. However, there is a high likelihood that the present concentration implies a temporary extreme with the possible financial crisis and redistribution among smaller companies. In any case, most experts agree that the S&P 500 of 2026 no longer functions as the objective barometer of corporate America.

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Two companies now determine the overall trend and impact the market to a larger degree than the entire sectors of the U.S. economy. So a reevaluation of what index ownership actually means appears to be justified. The essence of the S&P 500 is being tested in real time, and individual investors should recognize its limitations and implicit risks.