These five artificial intelligence (AI) stocks account for 27.3% of the entire S&P 500 index.

that much S&P 500 (^GSPC 0.02%) It consists of 500 stocks in 11 sectors, including information technology, energy, finance, and real estate. Although it is the most diverse of the major U.S. stock market indices, a select few technology stocks are gaining increasing influence over performance due to rapid increases in value.

As of this writing, the following five companies have a market capitalization of $12.5 trillion, accounting for 27.3% of the total value of the entire S&P 500.

1. microsoft (MSFT 0.04%) The market capitalization is $3.2 trillion.
2. apologize (AAPL 0.01%) The market capitalization reaches $2.9 trillion.
3. nvidia (NVDA 6.98%) The market capitalization reaches $2.8 trillion.
4. alphabet (GOOG 0.96%) (google 0.81%) The market capitalization is $2.2 trillion.
5. Amazon (AMZN 0.78%) The market capitalization is $1.9 trillion.

The S&P 500 index is up 11.5% so far in 2024. which S&P 500 Equal Weight Index The company, which gives equal weight to all stocks regardless of market capitalization, rose just 4.9%. The difference can (mostly) be explained by the average year-to-date gain of 26.3% for the five stocks above, highlighting their influence on S&P 500 performance.

Each of the five companies has a track record of success spanning decades, and they are leveraging that experience (and significant financial resources) to dominate emerging industries such as artificial intelligence (AI). If successful, it could have even greater influence on the S&P 500.

1. Microsoft: 7.2% of S&P 500

Microsoft is the world’s largest company. It was founded in 1975, and some of its flagship products, such as Windows and Word, are still used by billions of people today. Microsoft has expanded beyond software into gaming, hardware (computers and devices), Internet browsing, cloud computing, and now AI.

In early 2023, the company agreed to invest $10 billion in OpenAI, an AI startup that created the ChatGPT online chatbot. Microsoft is integrating OpenAI’s technology into most of its products to provide more value to users. For example, the Bing search engine now has a chatbot interface, and applications like Word, PowerPoint, and Excel are leveraging AI’s ability to quickly create content from text to video.

Microsoft has firmly established itself as a leader in AI thanks to its OpenAI partnership, and its products will continue to benefit from the lightning-fast innovation of startups.

2. Apple: 6.2% of S&P 500

Apple makes the world’s most popular consumer electronics products, with 2.2 billion active devices worldwide. This includes the flagship iPhone, iPad, and Mac computer lines. The iPhone has also led to successful multibillion-dollar spinoff devices such as the Watch and AirPods wireless headphones.

Apple seamlessly distributes AI software to consumers through its massive installed base. The latest iPhone 15 Pro already features the Apple-designed A17 Pro chip, which is designed to handle some AI workloads on the device. The company is reportedly in talks with OpenAI and Alphabet to determine which AI models will power its future devices, so consumers should expect the next iteration of the chip to come with even greater processing capabilities.

Eventually, devices like the iPhone may be equipped with advanced AI assistants that can answer complex questions and compose email and social media content. Modern smartphones are simply pocket-sized computers that make humanity in general much more productive. AI is set to accelerate this trend.

3. NVIDIA: 5.9% of S&P 500

Generative AI is developed, trained, and deployed in large, centralized data centers. Nvidia designs the graphics processing chips (GPUs) that populate these data centers, and they are the industry’s most popular chips among AI developers. During fiscal year 2024 (ending January 28), Nvidia’s H100 GPUs drove the company’s data center revenue to $47.5 billion, a whopping 217% increase from the previous year.

The company just reported financial results and data center revenue growth for the first quarter of fiscal 2025 (ended April 28). Acceleration By 427%. Although the H100 boosted sales, shipments of the new H200 GPU are scheduled to begin in the second quarter. It is capable of inference (the process of feeding real-time data to an AI model to make predictions) twice as fast as the H100 and consumes half as much energy, enabling companies like Microsoft, Amazon, and Google.

In essence, Nvidia is so far ahead of its competitors that developing next-generation AI models is impossible without GPUs. The company plans to launch a new series of chips based on the latest Blackwell architecture later this year, which will deliver even greater performance.

4. Alphabet: 4.3% of S&P 500

Alphabet is the parent company of Google and is also home to other technology subsidiaries, including YouTube, self-driving company Waymo, and AI developer DeepMind. Google Search remains Alphabet’s biggest source of revenue, but investors have questioned whether AI chatbots can break its dominance, given its ability to provide instant answers to almost any question.

When it comes to AI, data is king. Google Search has been a window to the entire Internet for over 20 years, so it holds more valuable information than any company on the planet. This allowed Alphabet to develop its own AI models and completed its latest Gemini lineup, designed to compete with OpenAI’s GPT-4 model. In some tests, Gemini was just as good, if not better, at understanding and generating text, images, video, and computer code.

Google has also built generative AI into its existing search engine. This engine provides text-based answers at the top of the page to save users the trouble of scouring the web results to find the information they need. Alphabet’s AI initiatives are resonating with investors who have propelled the company into an exclusive $2 trillion club this year.

5. Amazon: 3.7% of S&P 500

Amazon is best known as an e-commerce company, and online sales remain its biggest source of revenue. However, the company has expanded into streaming, digital advertising, robotics, and cloud computing (among other things), which have all contributed to the company’s position on this list. In fact, the cloud platform Amazon Web Services (AWS) is the largest in the industry and offers a growing number of AI services.

Amazon CEO Andy Jassy wants AWS to dominate the three layers of AI. There is an infrastructure layer, a model layer, and an application layer. To achieve this, the company now designs its own AI chips for data centers, is increasing its portfolio of off-the-shelf large language models (LLMs), including some it has developed in-house, and recently launched a product it calls a generative AI assistant. Q. Can we help businesses extract more value from the AWS platform?

Amazon also uses AI in its core e-commerce platform to recommend products to customers and help advertisers create engaging content. Simply put, this is one of the most diverse companies an investor can own during the AI ​​revolution.