Source: Wall Street See
US stocks have reached another new high. The S&P 500 index has risen by 14% this year, of which only five technology giants, Apple, Nvidia, Microsoft, Google and Amazon, contributed 60% of the increase.
The US stock market hit a record high again.
Driven by AI and large technology stocks, the S&P 500 index and the NASDAQ jointly hit a record high on Monday, and the key promoters were still those technology giants.
The S&P 500 index has risen by 14% this year, and only $Apple (AAPL.US)$, $NVIDIA (NVDA.US)$, $Microsoft (MSFT.US)$, $Alphabet-C (GOOG.US)$/$Alphabet-A (GOOGL.US)$and $Amazon (AMZN.US)$these five companies contributed 60% of the increase, and Nvidia alone contributed 34% of the increase in the S&P 500.
The market cap of these five giants now accounts for 25% of the total market cap of the S&P 500.
One key reason for the brilliant performance of these five giants is that their EPS has increased by 84% year-on-year in the first quarter, while other stocks in the S&P 500 index only increased by 5%.
In addition, the strong performance over the past four quarters has prompted Wall Street analysts to raise the EPS forecast for these five technology stocks in 2024 by 38%. In contrast, the EPS forecast of the other 495 stocks in the index was lowered by 5%.
Over the past two years, the performance gap between the S&P 500 market-cap-weighted index and the S&P 500 equal-weighted index has been widening, with the former soaring while the latter has almost stayed put.
The breadth of the market performance is extremely poor, with Morgan Stanley stating that the proportion of stocks that outperformed the S&P 500 in the past month has reached the lowest level in history.
In the S&P 500 market-cap-weighted index, the six technology stocks with a market cap of over 1 trillion US dollars rose by an average of about 11.5% in the second quarter, while the remaining 490-plus stocks in the index fell by an average of about 3% in the second quarter.
How long will this Matthew effect continue in the US stock market?
Especially the driving force behind the continuous new highs of technology giants is mainly the high valuations given to them by investors, not just their performance. Will a bubble occur? It has also become something that investors need to consider next.
Editor / jayden