A J.P. Morgan analysis says 42 stocks linked to artificial intelligence drove most of the S&P 500’s price gains since January 2024, showing how heavily the index’s advance has depended on one investment theme.
The firm’s Oct. 8 analysis placed the group’s contributions at roughly 60% to 80% across three measures: the index’s price return, earnings growth, and growth in capital spending and research and development. Those figures describe contributions to changes over time, rather than the companies’ share of the index’s market value.
Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan Asset & Wealth Management, said about 30% of S&P 500 stocks outperformed the index over the trailing three years. He also found sharp earnings growth among companies supplying AI infrastructure, while businesses adopting the technology had yet to show a comparable earnings advantage.
Analyst Jim Bianco offered a separate measure of concentration. In an Oct. 11 post, he estimated that 41 AI-related companies represented 48.68% of the combined market capitalization of S&P 500 members. Bianco drew his classification from Cembalest’s work, but his market-value group differs from J.P. Morgan’s 42-stock group.
Of Bianco’s 41 companies, 29 were directly involved in AI. The group also contained eight utilities and four capital-equipment companies, extending his definition beyond businesses developing AI products.
Bianco’s estimate captures the size of his selected companies at a point in time. J.P. Morgan’s analysis measures how much a different group contributed to changes in prices, earnings and spending since January 2024. The 48.68% market-value share therefore cannot be read as a contribution to the index’s return.
In a historical comparison of his 41-company group, Bianco found that only the 19th-century railroad boom had a higher concentration among the episodes he examined.
