How Seven Tech Giants Now Dominate 37% of the S&P 500: Beyond Diversification

Although these Tech companies are committing billions to AI infrastructure, there's still a lack of diversification, as the other S&P 493 stocks struggle with declining earnings

The 7 Giant Techs (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) have recently driven S&P 500 performance, outperforming S&P 493 (the other 493 stocks in the index, including sectors such as financials, healthcare, energy, and industrials) with higher earnings growth, though that growth is slowing. By contrast, the S&P 493 has shown considerably weaker results.

The S&P 500 had a 12% profit through November 2025. This was a harsh reality, since their performance was driven by the 7 tech giants rather than broad-based economic growth. There’s no doubt that these companies have an enormous influence on the market.

So far in 2025, their market capitalization has grown to $22 trillion in the S&P 500. This represents 37.4% of the S&P 500's total market capitalization, resulting in a lack of diversification in the index. The growth predicted for 2025 is sustainable, with earnings increasing by 4%, while expectations for the S&P 493 are down by 1.48%. Amazon, Meta, Google, and Microsoft are expected to invest collectively up to $400 billion in AI infrastructure.

"According to Tom Lee, Chief Investment Officer at Fundstrat Capital, the S&P 500 could reach between 7,200 and 7,300 by year-end. "

The Big Seven

What each of these seven tech companies plans to invest in is the following:

• Amazon is planning to spend between $100 billion and $125 billion on capital expenditures. Company guidance confirms that the vast portion of this investment will target the expansion of its foundational AI infrastructure and Amazon Web Services (AWS).

  
  

• Microsoft has announced plans for an estimated $80 billion investment in new AI-enabled data centers during its fiscal year 2025, a clear indication of Microsoft's strategic priority in supporting its advanced AI offerings.

  
  

• Google (Alphabet) has sharply increased its 2025 capital expenditure forecast, now projecting spending between $91 billion and $93 billion, up significantly from initial estimates of around $75 billion. This surge is primarily dedicated to expanding the technical infrastructure necessary to power its AI models and cloud services.

  
  

• Meta anticipates spending between $70 billion and $72 billion in capital expenditures, primarily for building out its AI infrastructure and data centers.

  
  

However, relying solely on the seven giant Techs not only concentrates risk but also means missing key investment opportunities. Diversifying into the S&P 493 offers exposure to other promising, potentially undervalued areas of the market.