The 45% Club

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap:

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The percentage of S&P companies in the AI trade has soared to nearly half the index’s value. (Source: Bianco Research)

Note that at the launch of ChatGPT in late 2022, these companies accounted for nearly 30% of the index’s value.

It’s just another way of looking at the narrow concentration that makes up today’s so-called diversified market index.

And another sign that, if any speed bumps occur in the AI story – which we expect will inevitably happen – the corresponding market reaction may be sizable.

Remember, stocks didn’t start falling when President Trump unveiled his “Liberation Day” tariff rates in April. The markets peaked in February, with China’s surprise announcement of the success of its DeepSeek launch.

~ Addison

P.S. Grey Swan Live! continues Thursday at 2 PM ET. This week’s guest is none other than George Gilder.

George once handed President Reagan the first microchip, and now he says today’s tech wave dwarfs the original $6.5 trillion tech revolution of the 1980s.

Eight exponential technologies — AI, quantum computing, robotics, self-driving cars, blockchain, chips, advanced biotech, and even space — are no longer advancing in isolation.

They’re colliding, compounding, and accelerating into what could be the single greatest wealth-building event of our lifetimes.

The pace is staggering. George just issued new research with our colleague Ian King, which you can review here before.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap:

Turn Your Images On

The percentage of S&P companies in the AI trade has soared to nearly half the index’s value. (Source: Bianco Research)

Note that at the launch of ChatGPT in late 2022, these companies accounted for nearly 30% of the index’s value.

It’s just another way of looking at the narrow concentration that makes up today’s so-called diversified market index.

And another sign that, if any speed bumps occur in the AI story – which we expect will inevitably happen – the corresponding market reaction may be sizable.

~ Addison

P.S. Grey Swan Live! continues Thursday at 2 PM ET. This week’s guest is none other than George Gilder.

George once handed President Reagan the first microchip, and now he says today’s tech wave dwarfs the original $6.5 trillion tech revolution of the 1980s.

Eight exponential technologies — AI, quantum computing, robotics, self-driving cars, blockchain, chips, advanced biotech, and even space — are no longer advancing in isolation.

They’re colliding, compounding, and accelerating into what could be the single greatest wealth-building event of our lifetimes.

The pace is staggering. George just issued new research with our colleague Ian King, which you can review here before.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!