Is the S&P 500 too concentrated in a few stocks?

It is historically concentrated: the top 10 stocks made up about 37% of the index as of late July 2026, compared with 18% to 23% from 1990 through 2015. That is high enough to raise real correlated and sector-specific risk, but it is not, on its own, evidence that S&P 500 funds are a bad investment or that a crash is coming.

What percentage of the S&P 500 is the top 10 stocks?

As of July 30, 2026, the 10 largest holdings, Apple, Nvidia, Microsoft, Amazon, Alphabet across two share classes, Broadcom, Meta, Micron, and JPMorgan Chase, made up 37.06% of the S&P 500 by weight. That is down slightly from a record 40.7% at the end of 2025 but still nearly double the 18% to 23% range that held for most of the 1990 to 2015 period.

Should I diversify away from the S&P 500 because of concentration risk?

Not by avoiding S&P 500 funds outright. A total U.S. market fund carries nearly the same top 10 concentration, since it is also cap-weighted, and rotating away from the market's largest companies has historically cost more than it has saved. A more durable approach is adding exposure the S&P 500 lacks entirely, such as international developed and emerging market funds, sized through a target allocation.

Is the S&P 500 Too Concentrated?

Written by Grace Ene, self-taught investor and founder of Invest with Prudie. Eight years in B2B SaaS across revenue operations and customer success, now applied to showing the math instead of asking you to trust a black box.

A single S&P 500 index fund is sold as the definition of diversified: 500 companies, one ticker, done. But as of July 30, 2026, the 10 largest of those 500 companies make up 37% of the fund's value, more than the smallest 400 companies combined. If you own an S&P 500 fund and call it diversified without qualification, it is worth knowing exactly how true that still is.

The short answer

Somewhat, yes. The top 10 stocks in the S&P 500 make up about 37% of the index as of late July 2026, well above the 18% to 23% range that held from 1990 through 2015. That alone is not a reason to sell or avoid S&P 500 funds. It is a reason to know what you own and add true diversifiers, like international or small-cap funds, instead of assuming one fund does all the diversifying.

How concentrated is the S&P 500 right now?

As of July 30, 2026, the 10 largest positions in the SPDR S&P 500 ETF Trust (SPY), the ETF that tracks the index, made up 37.06% of its total value. Apple led at 7.64%, followed by Nvidia at 7.37%, Microsoft at 5.23%, Amazon at 3.60%, Broadcom at 2.86%, Meta at 1.85%, Micron Technology at 1.54%, and JPMorgan Chase at 1.47%. Alphabet appeared twice, split across its two share classes, for a combined weight of 5.51%. Because those two lines are one company, the true number of distinct businesses behind that "top 10" figure is really nine, an even tighter concentration than the headline number suggests.

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Compare that to history. From 1990 through 2015, the top 10 S&P 500 stocks held a stable 18% to 23% of the index. Concentration climbed to around 27% at the peak of the dot-com bubble in 2000, then fell back for over a decade. By the end of 2025, the top 10's share reached a record 40.7%, according to S&P Dow Jones Indices data cited by RBC Wealth Management, before easing slightly to today's 37%. Today's level is still nearly double the multi-decade norm.

Why has the S&P 500 gotten this concentrated?

The S&P 500 is cap-weighted: each company's share of the fund rises or falls with its market value, and there is no cap on how large one name can get. Mega-cap technology and AI-linked companies have posted outsized earnings growth and stock returns over the past two years, and the index is simply reflecting that. In the 28 trading sessions from late March through early May 2026, just 10 stocks were responsible for 69% of the S&P 500's gain, a sign of how much of the market's recent return has come from a small handful of companies rather than broad-based growth. That is a separate question from whether those companies are fairly valued, which is covered in is the AI stock boom a bubble; this is about how much of your fund rides on them either way.

Does concentration actually put your money at more risk?

What concentration does increase

A cap-weighted S&P 500 fund's return now leans heavily on a small number of companies and, largely, on one theme: AI-linked technology. Technology alone makes up close to 40% of the index by sector. If those companies stumble together, that is correlated risk, not the spread-out risk a "diversified" fund implies, and the fund can fall further and faster than a more evenly weighted index would.

What concentration does not mean

A high weight is not, on its own, proof that a stock is overvalued or doomed to fall. These companies earned their weight through real profit and revenue growth, and cap-weighting is doing exactly what it is designed to do: reflect the market's current view of where value sits. Concentration is a risk to understand and manage, not a signal that predicts a crash or tells you when to sell.

The honest counterargument: shouldn't you just avoid S&P 500 funds?

The strongest version of that argument goes like this: if 37% of a fund marketed as "diversified" rides on 10 stocks, it is not really diversified, so why not move to something broader, or actively avoid the most crowded names? That instinct is fair and deserves a real answer, not a dismissal.

Two things weaken it in practice. First, a total U.S. stock market fund like VTI holds thousands of companies, but because it is also cap-weighted, its top 10 concentration is nearly identical to the S&P 500's, the same mega-caps dominate both funds. Switching funds without changing the weighting method solves very little. Second, betting against the market's largest, most profitable companies has a losing history more often than not: equal-weight S&P 500 funds, which do reduce concentration by design, have underperformed the standard cap-weighted index in most of the last 15 years, precisely because mega-caps kept outperforming smaller ones through that stretch. Guessing which stocks have gotten "too big" and rotating away from them has cost more than it has saved.

The more durable fix is not abandoning the S&P 500. It is adding what the index structurally lacks: meaningful exposure outside the largest 500 U.S. companies. International developed and emerging market funds, and a modest small-cap tilt, do not remove concentration from an S&P 500 holding, but they dilute its share of a total portfolio and add return streams that do not move in lockstep with the same handful of names. See how to choose your asset allocation for how that split gets sized to you specifically.

What a beginner should actually do about S&P 500 concentration

Do not sell your S&P 500 fund over this stat alone. Concentration is a risk factor to manage, not a crash signal.
Check whether you are doubling up: holding an S&P 500 fund and individual shares in Apple, Nvidia, or Microsoft means you are more concentrated than the index alone suggests. See single stocks vs index funds.
Add real diversifiers, mainly international developed and emerging market funds, rather than swapping one U.S. cap-weighted fund for another. See ETFs for beginners and how index funds work.
If concentration specifically bothers you, a modest equal-weight or small-cap allocation can dial it down, with the honest tradeoff that it has lagged cap-weighted funds through most of the last 15 years.
Let a target allocation built for your own timeline and risk tolerance drive the decision, not a headline stat about 10 stocks.
Resist the urge to trade around this. Rotating out of the market's current winners because they got large is a form of market timing wearing a diversification costume. See time in the market beats timing the market.

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The one productive move: add up what percentage of your total invested portfolio, not just your S&P 500 fund, sits in the same 5 to 10 mega-cap names once you count any individual stock holdings and other funds that also hold them. That combined number, not the index's own weighting, is the one that actually determines your risk.

The quick version

The top 10 S&P 500 stocks made up 37.06% of the index as of July 30, 2026: Apple, Nvidia, Microsoft, Amazon, Alphabet (two share classes), Broadcom, Meta, Micron, and JPMorgan
The historical average from 1990 through 2015 was 18% to 23%, meaning today's level is nearly double the multi-decade norm
Concentration hit a record 40.7% at the end of 2025, above the roughly 27% peak of the 2000 dot-com bubble, then eased slightly to today's 37%
The index is concentrated because it is cap-weighted and mega-cap, AI-linked companies have posted outsized gains: 10 stocks drove 69% of the index's return in a 28-session rally from late March to early May 2026
High concentration raises correlated, sector-specific risk, but is not itself proof of overvaluation or an impending crash
Switching to a total-market fund does not fix concentration, since it is similarly cap-weighted; adding international and small-cap exposure is the more durable diversifier
Betting against the market's largest companies by rotating away from them has underperformed more often than not over the last 15 years
Check your combined mega-cap exposure across all holdings, not just your index fund's own weighting, and let your target allocation guide any changes

Concentration will keep making headlines every time these 10 companies report earnings, because so much of the index's movement now depends on them. That is useful to know. It is not a reason to abandon a fund that, even today, still owns hundreds of other companies you would otherwise have to buy one by one.