On Friday, we published our annual recap report for 2024. The report provides a complete rundown of everything that went on across financial markets this year, including the trend of incredible concentration in stocks up at the top. Replicated below is a chart from that report showing the combined market cap of the S&P 500's eight largest stocks as a percentage of total S&P 500 market cap for each year going back to 1994.

Currently, the eight largest members of the S&P—at the moment those are the Magnificent Seven names plus the newest trillion-dollar stock: Broadcom (AVGO)—account for 35.6% of S&P 500's total market cap. That's a record high. We would also note that the growing share of the S&P 500's market cap that this small handful of stocks accounts for isn't exactly a new phenomenon. Over the past decade, the largest stocks' share of market cap has steadily been growing, and actually, this isn't the only record high to highlight with prior records being set at 29% at the end of 2021 and 30% last year. With that said, the 5.6 percentage point jump versus last year is one of the largest one-year increases in concentration at the top that we've seen.

Drilling down a step deeper, below we again show the collective share of S&P 500 market cap possessed by the eight largest members for each year since 1994, but this time with a breakdown by sector.  Of the current group of largest stocks, half belong to the Tech sector: NVIDIA (NVDA), Apple (AAPL), Microsoft (MSFT), and Broadcom (AVGO).  Of course, zooming out for context, the Tech sector, as a whole, holds a historically massive S&P 500 weighting at 32%, but these four stocks alone account for a huge share (21.5  percentage points) of that.  In other words, the S&P 500 is heavily concentrated in Tech, and Tech is heavily concentrated in these four stocks.

As for the other largest members, Communication Services names—Meta Platforms (META) and Alphabet (GOOGL)—account for a combined 7.21% of the S&P 500's total market cap and the remaining two names from the Consumer Discretionary sector—Tesla (TSLA) and Amazon (AMZN)—are to thank for 6.95%.

As for the rest of the sectors, 2024 is going to end with Financials not having a single stock in the eight largest S&P members for the first time since 2009. This is thanks to Broadcom (AVGO) unseating Berkshire Hathaway (BRK.B) as the index's eighth largest stock. Meanwhile, Industrials hasn't had a stock land in the top eight since 2015, and Consumer Staples has now gone a decade without a top eight stock. In the past five years, Health Care has only found its way into this group once in 2022, but otherwise, it has been absent.  Materials, Real Estate, and Utilities haven't had a member land in the top eight largest stocks in any year since at least 1993.

Again, the present situation is historic. Aside from there never having been such a large share of the S&P 500's market cap coming from the top, there also hasn't been a year since at least 1993 when these top eight stocks have had such narrow sector representation.  As shown below, only three sectors are represented among the S&P 500's top eight stocks. Historically, it has been most common to see six different sectors represented among these eight names.

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