by Andrew Bary, Barron's article:
The biggest keep getting bigger and more dominant.
The five technology giants that dominate the S&P 500 index -- Apple ( AAPL ) , Microsoft ( MSFT ) , Alphabet (GOOG), Amazon.com ( AMZN) , and Facebook ( FB ) -- accounted for a combined 22.9% of the index Friday, an apparent record. The data are from S&P Dow Jones Indices.
Three of the tech leaders -- Microsoft ( MSFT ), Alphabet, and Facebook ( FB ) -- hit new highs Friday as the S&P 500 reached a record.
Rarely has the S&P 500 been so concentrated at the top. The Big Five were a combined 21.7% at the end of 2020.
At year-end 2019, the five largest stocks in the index totaled 17.2% of the index. At that time, Berkshire Hathaway (BRK.B) was No. 5., not Facebook ( FB ), which now ranks fifth. At year-end 2018, the top five were 15.4% of the S&P 500 index (Berkshire again was fifth).
It is notable that at the end of 1999, right before the peak in tech stocks, the top five companies were 16.8% of the S&P 500. Those five stocks in order of size were Microsoft ( MSFT ), General Electric (GE), Cisco Systems (CSCO), Walmart (WMT), and Exxon Mobil (XOM). GE, Cisco, and Exxon are now nowhere near the top.
So far this year, Microsoft ( MSFT ) (up 30.2% through Friday), Alphabet (up 57.3% based on the nonvoting shares, GOOG) and Facebook ( FB ) (up 35.4%) are powering the leaders. Apple ( AAPL ) and Amazon ( AMZN ) were up about 12% year-to-date through Friday, behind the S&P 500's 17.5% gain.