Nvidia is dominating the S&P 500 more than any company in at least 44 years

Nvidia is a milestone magnet.

Less than one month after becoming the first publicly traded company to reach $4 trillion in market cap, the chip designer can add another superlative to its list.

“The chart below shows the biggest stock by market cap in the S&P 500, and it confirms the extreme AI concentration in the market today,” Apollo Global Management Chief Economist Torsten Slok wrote. “Nvidia now has the biggest weight in the S&P 500 of any individual stock since the data began in 1981.”

As Myles Udland over at Yahoo Finance remarked, it also has the highest trailing price-to-earnings ratio the S&P 500’s biggest stock has traded at since Microsoft in 1999.

The Jensen Huang-led company was able to ascend to these lofty heights thanks to its starring role in an AI boom that continues to show few signs of a slowdown.

And I’d be remiss not to mention that BCA Research recently published a report showing that concentration, in and of itself, is not predictive of long-term forward returns.

BCA’s caveat to that, of course, is that other metrics that would tend to be somewhat correlated with concentration (like size and valuation) still play a role in influencing the outlook for performance over the long haul.