The best performing assets in the stock market this year are those that have to do with AI. Naturally, investors have been wondering how to get exposure to these bullish trends. In this article, we caution against chasing performance and point out that you’re likely already benefitting from AI thanks to index construction.
AI dominates the S&P 500
The biggest AI name in the market is Nvidia (NVDA), whose high priced semiconductor chips are said to be, “powering the AI revolution.” Another notable AI related name is Microsoft, which has a giant stake in OpenAI, the company behind ChatGPT. Then you have Apple, which is making a big push into AI with their branded Apple intelligence. What do these three stocks have in common? They are top holdings inside of the S&P 500, together making up 20% of the index.
In fact, the top 9 holdings in the S&P 500 index today are clear technology winners that have all positioned themselves as “leaders in AI.” So anyone with exposure to the S&P 500 inherently has exposure to the biggest AI companies in the world. While it’s true that each of these 9 stocks has individually out performed the index this year, you would have had to know that at the beginning of the year for that to matter.
The beauty of index investing is that the biggest winners, like the ones above, can rise to infinity, while the worst losers can only fall to $0. As those winners keep going up, they help power the index higher. Broadcom, for example, was just a 0.60% weight in the S&P 500 three years ago, but as its share price has risen its impact in the S&P 500 has more than tripled! Nvidia’s impact on the index has tripled as well, moving from a 1.60% weight in the index to 6.43% today. These two stocks have replaced and exceeded the impact from prior top weights like Home Depot and JP Morgan.
As the overall economy benefits from AI, the stocks powering that growth are helping advance the largest indexes in the world. So before you try to figure out how to benefit from this hot trend, consider first that you may already be benefitting without even realizing it.

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