4 Stocks Driving Most of The S&P 500's (VOO) Historic Run

A Record-Breaking Climb Amid Market Jitters

The S&P 500 etched its name in history yesterday, closing at a new all-time high of 6,501.86, despite investor concern about Nvidia‘s (NASDAQ:NVDA) earnings and doubts about the ongoing AI boom. It’s been a rollercoaster year marked by fears of inflation, rising Treasury yields, and geopolitical tensions, yet the index has scaled a “wall of worry,” defying skeptics with a 10% gain so far this year. 

The Vanguard S&P 500 ETF (NYSEARCA:VOO), which mirrors the index’s performance, has marched in lockstep, offering investors an accessible way to ride this wave. Yet, this historic run masks a concentrated reality: just four stocks — Nvidia, Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) — account for a disproportionate share of the index’s gains, wielding outsized influence over the broader market’s trajectory. Their dominance underscores both opportunity and risk in today’s market.

Nvidia: The AI Powerhouse

Nvidia’s meteoric rise has been the S&P 500’s beating heart, with its 8.1% weighting in the index. The chipmaker’s stock soared 171% in 2024, driven by insatiable demand for its GPUs, pivotal for artificial intelligence, machine learning, and data centers. 

Nvidia’s fiscal Q2 2026 revenue surged 56% year-over-year to $46.7 billion, slightly exceeding analyst expectations, while its high margins — converting over half its sales to net income — cemented its status as a cash-flow juggernaut. 

As companies like Microsoft and Amazon (NASDAQ:AMZN) pour billions into AI infrastructure, Nvidia’s chips remain the gold standard, fueling projections of $3 trillion to $4 trillion in AI spending by decade’s end. 

Despite a recent dip after its earnings, (shares are down another 3.6% today) Nvidia’s innovation and market dominance keep it a cornerstone of the S&P 500’s ascent.

Microsoft: Cloud and AI Synergy

Microsoft, holding a 7.3% S&P 500 weighting, has been a steady force, with its stock climbing on the back of its cloud and AI prowess. The company’s Azure platform, bolstered by AI integrations, has seen robust growth, with Microsoft committing $80 billion in 2025 to expand AI-enabled data centers. 

Its stock gained steadily in 2024, reflecting investor confidence in its diversified tech portfolio, from cloud services to software and gaming. Microsoft’s ability to leverage AI across its ecosystem, coupled with strong cash flows and a capital-light model, has driven its market cap to rival Nvidia’s. 

As enterprises increasingly adopt AI-driven solutions, Microsoft’s strategic investments position it as a linchpin in the S&P 500’s rally, blending stability with cutting-edge innovation.

Apple: Resilience Through Innovation

Apple, with a 5.8% index weighting, remains a bedrock of the S&P 500’s gains, despite facing headwinds like a 13% sales drop in China in Q1 2025. Its stock has rallied on the strength of its ecosystem, with new AI-driven features in iOS and hardware like the iPhone 16 boosting consumer demand. 

Apple’s matte-finish devices and supply chain efficiencies have maintained its premium valuation, even as it briefly ceded the title of the world’s most valuable company to Nvidia. The company’s ability to innovate while sustaining brand loyalty has driven consistent gains, contributing significantly to the S&P 500’s upward trajectory. The tech giant’s focus on privacy and seamless integration continues to resonate, ensuring its outsized role in the index’s record run.

Alphabet: The Search and Cloud Giant

Alphabet, with a combined 3.9% weighting for its Class A and C shares, has powered the S&P 500 through its dominance in search and growing cloud business. Google’s AI advancements, including enhancements to its search engine and YouTube, have bolstered its revenue streams, allowing it to stick its fingers in other pies, like quantum computing. 

Alphabet’s cloud division, fueled by AI infrastructure demand, has gained traction, with the company investing heavily to compete with Azure and AWS. Despite a $34.5 billion unsolicited bid for its Chrome browser, Alphabet’s stock rose 2% yesterday, reflecting investor optimism. 

Its diversified portfolio and AI-driven growth have made it a key driver of the index’s gains, though its gains lag Nvidia’s explosive performance.

Key Takeaway

The S&P 500’s record highs mask a critical vulnerability: concentration risk. With Nvidia, Microsoft, Apple, and Alphabet accounting for nearly 25% of the index’s weight, its performance hinges heavily on these tech titans, diminishing its historical broad-based nature. A stumble in any one of them could ripple across the market, sending VOO lower.

Investors can take advantage of stocks and industries beyond these tech behemoths by opening a brokerage account to explore diverse opportunities — stocks like Palantir Technologies (NASDAQ:PLTR) or sectors like industrials, which outperformed tech in early 2025. Diversification remains key to navigating this top-heavy market.

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