The information technology sector now commands 39.4% of the S&P 500's total market capitalization. This breaks the previous record of nearly 35% set during the March 2000 dot-com bubble. When including major corporations like Alphabet, Amazon, and Meta that are heavily investing in artificial intelligence, the combined share crosses 50% of the index's value.
Since the S&P 500's low in March 2026, the IT sector has gained approximately 47%, driving the broader market recovery. Within the sector, semiconductor companies have led the charge, with firms like Micron, Intel, and AMD seeing significant gains.
The surge is fueled by corporate spending on artificial intelligence, benefiting the entire tech supply chain. This concentration raises risk. Analysts warn that a rotation out of technology could disproportionately impact the broader market, noting the S&P 500 took over a decade to recover after the dot-com peak.
While corporate earnings are stronger than in 2000, this level of concentration is unprecedented. Investors holding passive S&P 500 index funds now have substantial exposure to the technology sector's continued outperformance.