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:
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.
