Key Takeaways
- Nvidia Corp. (NVDA) makes up about 7.3% of the S&P 500, the best focus of anybody inventory in 35 years of knowledge from Leuthold Group.
- Different well-liked index mutual and exchange-traded funds (ETFs) inform the same story, with the AI chipmaker very closely weighted.
- It is not simply Nvidia. The Magnificent 7 make up roughly a 3rd of the S&P 500.
- Nvidia is chargeable for roughly a fifth of the S&P 500’s positive factors this yr, in response to a current report.
Not all S&P 500 corporations are created equal. In truth, for those who’ve invested in a fund that tracks the S&P 500, you is perhaps shocked how closely it’s weighted to a single firm: Nvidia (NVDA).
With a market capitalization of about $4.2 trillion, Nvidia accounts for 7.3% of the S&P 500’s complete valuation of practically $59 trillion. That’s equal to the underside 231 corporations—practically half the index—mixed. That’s the most important weight for anybody firm up to now 35 years, in response to Leuthold Group information cited by The New York Instances.
Different well-liked funds inform the same story. Nvidia makes up practically 7% of the Vanguard Whole Inventory Market ETF (VTI), over 13% of the Philadelphia Semiconductor Index (SOX), and 16% of the SPDR Expertise Choose Sector ETF (XLK).
The Magnificent 7, which additionally consists of Alphabet (GOOG, GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), and Broadcom Inc. (AVGO), now makes up greater than a 3rd (34%) of the S&P 500 by market cap.
What It Means for Your Portfolio
Market-cap-weighted indexes, such because the S&P 500, think about an organization’s valuation (share worth multiplied by the variety of shares). Nvidia is so closely weighted as a result of its inventory has surged in recent times as demand for AI chips has grown. In different phrases, whenever you’re investing within the S&P 500, you are largely investing in tech shares.
The Vanguard S&P 500 ETF (VOO) is up near 10% in 2025, and Nvidia is chargeable for a couple of fifth of these positive factors, in response to an ETF.com report. If this development continues, Nvidia would account for a fifth of the fund’s complete progress for the second consecutive yr, the report mentioned.
Many monetary advisors have been rethinking how to make sure they’re purchasers are diversified.
“With the Magnificent 7 shares comprising such a large proportion of the S&P 500’s market capitalization, we’ve been exploring methods to nonetheless preserve giant cap U.S. fairness publicity with out growing our Magazine 7 publicity,” mentioned David Flores Wilson, an authorized monetary planner at Sincerus Advisory in New York Metropolis. “A method we’ve been doing that is by allocating to equal weight S&P 500 ETFs like Invesco’s Equal Weight ETF (RSP).”
For this yr, your returns for RSP can be decrease—it has gained about 5.7% in 2025, in contrast with 8.6% for VOO. Nonetheless, in years when the tech corporations have floundered, it is seemed like a greater wager. For instance, RSP misplaced 11.6% in 2022, in contrast with the 18.2% drop for VOO that yr.
The Backside Line
Nvidia makes up an unprecedented quantity of the weighted S&P 500 index. That is as a result of Nvidia’s inventory has surged in recent times, making it probably the most worthwhile firm on Earth. The chipmaker’s returns have helped carry the S&P 500 as an entire, nevertheless it additionally presents draw back danger if its shares have been to lose worth.
