A group of 42 artificial intelligence-related stocks has generated around two-thirds of the S&P 500’s price gains since the start of 2024, highlighting the growing concentration of market performance among companies linked to AI.
According to figures provided, the 42 stocks accounted for 22 percentage points of the index’s total 33 per cent price gain over the period. The remaining 458 companies contributed 11 percentage points.
The same group also accounted for 58 per cent of the S&P 500’s earnings growth and 81 per cent of the growth in capital expenditure and research and development spending since the beginning of 2024.
By comparison, companies outside the AI-focused basket contributed about 20 per cent of the index’s combined growth in capital expenditure and research and development spending.
The figures point to the growing influence of AI-related businesses on corporate earnings, investment and sharemarket returns. They also raise questions about how broadly the current market rally is being shared across listed companies.
The concentration is also reflected in market breadth, a measure of how many shares are participating in an overall market advance. Only 29 per cent of S&P 500 stocks outperformed the index over the previous three years, according to the figures. That is close to the roughly 25 per cent level recorded during the dot-com bubble around 2000.
The trend presents a mixed picture for investors. Strong earnings and heavy investment in AI infrastructure have helped support the leading companies, while the relatively narrow distribution of gains leaves the broader index dependent on a smaller group of stocks. Recent market coverage has also highlighted concerns about this concentration, even as expectations for AI-related earnings remain strong.
The figures do not establish whether AI stocks are overvalued or how they will perform in the future. They do, however, show how closely the S&P 500’s recent gains have been tied to companies benefiting from AI investment.
For the wider market, the key question is whether earnings and investment growth will spread to more companies, or whether a relatively small group of AI-linked businesses will continue to account for most of the index’s progress.
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