Semiconductor Exposure in S&P 500 Hits 18%. That's More Than Double the Tech Bubble Peak.

Semiconductor stocks now make up roughly 18% of the S&P 500—up from about 2% a decade ago—creating a concentrated exposure driven by a handful of mega-cap chip names. NVIDIA alone ($5.46T market cap) and other leaders like AMD and TSMC have powered outsized returns and index moves, with NVDA up ~65.5% over the past year versus the S&P’s ~24.3%. The concentration shows up across style and regional indices (e.g., ~27% of emerging markets tied to SK Hynix, Samsung and TSMC), meaning traditional diversification may understate correlation risk. The article warns portfolio allocations and index-based diversification are now more about semiconductor exposure than sector labels, raising potential volatility and allocation challenges for investors.