The last time technology consumed this much of the S&P 500, it was March 2000. The information technology sector has hit 39.4% of the index’s total market capitalization, blowing past the previous record of nearly 35% set during the dot-com bubble.

And when you add in the mega-cap companies outside the traditional IT classification that are pouring money into artificial intelligence, like Alphabet, Amazon, and Meta, the combined share crosses 50% of the S&P 500’s total market value.

The numbers behind the surge

Since the S&P 500 hit its low point in March 2026, the IT sector has gained approximately 47%. The broader index recovery has been strong, but tech has been doing the heavy lifting.

Semiconductors have been the standout performers within the sector. Micron has surged 230% from that March low. Intel and AMD have each climbed over 160%.

The IT sector now accounts for over 25% of the S&P 500’s trailing 12-month net income. That’s nearly double its share of earnings compared to Q1 2000, when tech was riding pure speculation.

Why AI changed the math

The catalyst behind this concentration isn’t a mystery. Artificial intelligence spending has turned into a corporate arms race, and the entire supply chain, from chip designers to cloud providers to data center operators, has benefited from the spending wave. That’s how you get from 39% to over 50% when you count all the participants.

What this means for investors

Matthew Maley from Miller Tabak has flagged the risk of a reversal if leading technology stocks soften. When half the index is concentrated in one trade, even a modest rotation out of tech could trigger a disproportionate sell-off in the broader market.

For context, investors who owned the S&P 500 at its dot-com peak in March 2000 had to wait over a decade to break even. The fundamentals are stronger this time around, with actual earnings rather than just promises, but the concentration risk is arguably worse. Nearly 40% in one sector is uncharted territory.

The practical takeaway is that anyone holding a passive S&P 500 index fund right now has, whether they realize it or not, made a massive bet on technology continuing to outperform.