Top-heavy markets are great when S&P 500 giants are going up. But they sting when these dominant stocks fall back to reality.
Four S&P 500 behemoths, including Apple, Tesla, Alphabet and Microsoft, shed more than $1 trillion in total market value from their 52 week highs, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. That drop is akin to losing both JPMorgan Chase and Walmart, which combined are valued at roughly that much.
It's the start of a shift away from giant S&P 500 companies many have braced for. "Market performance and investor positioning have become increasingly concentrated in information technology-related names, which dominate the Nasdaq 100 index," said Wells Fargo Advisors' Sameer Samana. "Investors should avoid chasing recent performance and continue to focus on the favorable-rated energy, industrials, materials and health care sectors on pullbacks."
Who Needs Apple?
Take a look at Apple. The former S&P 500 kingpin is in a tailspin. Shares are down more than 10% this year on fears its core smartphone growth is slowing and it's behind in AI.
That's a drop of more than 13% from its 52-week high notched on Dec. 14 of last year. And that's wiped away a staggering $413 billion in shareholder value.
Not far behind, though, is Tesla. Investors are down $357 billion from the electric carmaker stock's 52-week high on July 19, 2023. That's due to a crushing 41% fall from the high. It's down nearly 30% just this year.
The S&P 500 Keeps Marching On
There's good news, though. Some investors worry the S&P 500 is so reliant on its giants, if they falter, pain is in store for everyone. These four stocks account for nearly 20% of the S&P 500 after all.
But in reality, the S&P 500 is broad and diverse enough it just keeps moving higher. The S&P 500 is still up nearly 8% this year despite big falls by Apple and Tesla. And the S&P 500 is only 1% away from its all-time high hit on March 8 of this year.
Owning the S&P 500's giant has hurt in some spots this year. But if you own the whole index, the pain is hardly noticeable.
Easy Come, Easy Go
Biggest market value losses from 52-week highs
| Company | Ticker | % Drop from high | Value lost ($ billions) |
|---|---|---|---|
| Apple | -13.5% | -$413.6 | |
| Tesla | -40.6% | -$357.0 | |
| Alphabet | -10.5% | -$217.3 | |
| Microsoft | -3.8% | -$118.4 |
