Should Investors Be Worried That the "Magnificent Seven" Make Up 35% of the S&P 500?

Group 1 - The Motley Fool research report highlights the performance of the "Magnificent Seven" stocks, which include Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla, and their significant outperformance compared to the S&P 500 index [1][2][3] - From 2015 to 2024, the Magnificent Seven achieved a return of 697.6%, while the S&P 500 gained 178.3% during the same period, indicating robust growth among these companies [4] - As of December 2025, the Magnificent Seven represent 34.3% of the S&P 500, a significant increase from 12.3% in 2015, reflecting their growing market capitalization [5] Group 2 - The S&P 500 is a market-cap weighted index, meaning that the influence of each component is based on its total market value, which has led to the Magnificent Seven comprising a larger portion of the index [5] - The top holdings in the S&P 500, including the Magnificent Seven, contribute significantly to the index's overall value, which can create both advantages and challenges for investors [6] - The weight of the top components in the S&P 500 as of December 31, 2025, includes Nvidia at 7.32%, Apple at 6.49%, Microsoft at 5.8%, and others, showcasing their dominance in the index [7]