As artificial intelligence continues to reshape the global markets, the extent of disruption is apparent in a new report highlighting the rapid impact of AI companies on the S&P 500 index.
AI and tech stocks, in general, dropped during mid-July 2024, following a Bloomberg report suggesting that the Biden administration is considering severe trade restrictions targeting companies that continue to supply China with advanced semiconductor technology.
As a result, the S&P 500 dropped by more than 1.3 percent, while the tech-heavy Nasdaq Composite saw its worst day since 2022, sinking 2.7 percent.
Is this a signal that the AI-driven rally of stocks such as Nvidia is not sustainable?
This prompted analysts at BestBrokers to take a closer look at the large-cap AI companies and examine their performance over the past year. The firm has provided the output of this inquiry to Digital Journal.
To make the assessment, the company picked 38 stocks they consider to be closely tied to artificial intelligence from the S&P 500 and compared the share prices from July 15 2024 to one year prior.
In addition, BestBrokers examined the market capitalisation and how this relates to the market size of the entire index. They determined that in July 2024, AI companies accounted for 49.42 percent of the aggregate market capitalisation of the S&P 500. Their total market cap currently stands at $23.8 trillion.
These data about the share prices is as of July 2024. Such data influences the current market capitalisation of companies.
Overall, driven by the growth of AI stocks, the S&P 500 index has increased by 27.7 percent in price since July 2023. Shares of AI companies are now up 53.68 percent from last year, while the rest of the index components grew 24.74 percent.
Top-performing AI stocks include Supermicro (SMCI), which rallied 201 percent between July 15, 2023, and July 15, 2024, as well as Nvidia (NVDA), up 175.7 percent for the same period, and CrowdStrike (CRWD), which increased by more than 150.8 percent.
Most of the ten best-performing AI companies in terms of share price growth are semiconductor companies – Nvidia, Micron Technology (MU), Broadcom Inc. (AVGO), KLA Corporation (CLAC), Applied Materials, Inc. (AMAT), Qualcomm (QCOM), and Lam Research Corporation (LRCX).
In addition, the major AI players such as Apple, Microsoft, and Nvidia expanded in market size; the entire AI sector grew to a massive $23.8 trillion in market capitalisation year-on-year. This is approximately 49.42 percent of the S&P 500 aggregate market cap, currently standing at around $48.168 trillion.
