S&P 500: Nvidia dusts off Warren Buffett in the $1 trillion race

Thursday’s insane rally in Nvidia shares put $184 billion into investors’ pockets in one day. Most notably: He pushed Nvidia’s stature in the S&P 500 ahead of Warren Buffett’s Berkshire Hathaway — again.


Shares of Nvidia (NVDA) jumped more than 26% in a day after a profit explosion. That made the chip designer worth $939.3 billion overnight — a remarkably big gain for a giant S&P 500 stock of this size. And the value of Nvidia exploded Berkshire Hathaway (BRKB) as the fifth most valuable stock in the S&P 500. Buffett’s investment firm is worth $702 billion.

Nvidia is just one example of how large-cap tech stocks are absolutely carrying the S&P 500 this year. This stock alone accounts for 23% of the $2.6 trillion earned by S&P 500 investors this year. Berkshire Hathaway’s gain this year is just 0.8%.

“Big Tech is back, and it’s not too soon for US equity investors,” said Nicholas Colas of DataTrek Research.

You’d be losing money if it wasn’t for big tech S&P 500

You can thank megacap technologies for the impressive gains in the S&P 500 this year. It’s not just hyperbole.

If you excluded the top eight S&P 500 stocks this year, the S&P 500 would be down 0.3% instead of up almost 8%, says Howard Silverblatt, index analyst at S&P Dow Jones Indices . And the S&P 500 would be down 0.4% if you omit the information technology and communication services sectors.

Being in the wrong place in the S&P 500 this year is expensive. More S&P 500 stocks (271) are down this year than up. And some are total wipeouts. So far, 43 stocks in the S&P 500 have fallen 20% this year, while only three others have risen 20% or more, Silverblatt found.

Nvidia shares have so far risen nearly 160% in 2023.

Nvidia dismisses others, including Warren Buffett

Nvidia is more than pulling its weight in this year’s tech rally.

It is the third largest contributor to the S&P 500 gain this year. That’s impressive considering it’s still only the fifth most valuable company in the index. But thanks to its key position in the AI ​​revolution, Nvidia is making rapid progress. This is the second time Nvidia has edged out Berkshire Hathaway in terms of market value. It has already done this in November 2021 until it drops again in early 2022.

But Nvidia is back. He is only 23% behind Amazon.co.uk‘s (AMZN) $1.2 trillion valuation. And he only needs to win 64% to catch up Alphabet (GOOGL). It might seem strange to call a 64% rally small, but Nvidia’s company has a mountain of enthusiasm behind it. Analysts believe demand for chips to power AI systems will drive Nvidia’s earnings up 132% this fiscal year alone.

It’s a stock that Buffett would probably like to own right now.

The most valuable companies in the S&P 500

Nvidia just overtook Berkshire Hathaway in market capitalization

Company Name Teleprinter Year-to-date % ch. Market value (thousands of dollars)
Apple (AAPL) 33.1% $2.7
Microsoft (MSFT) 35.9% $2.4
Alphabet (GOOGL) 40.0% $1.6
Amazon.co.uk (AMZN) 36.9% $1.2
Nvidia (NVDA) 159.9% $0.9
Berkshire Hathaway (BRKB) 3.3% $0.7
Metaplatforms (META) 110.0% $0.6
You’re here (TSLA) 49.8% $0.6
Visa (V) 7.5% $0.5
UnitedHealth Group (A H) -9.9% $0.4
Sources: S&P Global Market Intelligence, IBD

Follow Matt Krantz on Twitter @mattkrantz


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