Semiconductor Weight Tops 15% in S&P 500 as AI Rally Raises Concentration Risk

Semiconductor stocks now account for more than 15% of the S&P 500, a rare level of sector concentration that Strategas says underscores how much the U.S. equity rally depends on AI-linked chip shares. Strategas said in a May 12, 2026, chart that only a few industry groups have reached similar index weightings since 1990, including tech hardware during the dot-com bubble, energy around the financial crisis and software in the late 2010s. Because the S&P 500 is market-cap weighted, gains in large chip and AI-related companies have increased their influence on index returns. Todd Sohn, chief ETF strategist at Strategas Securities, said such a large single-industry weight is “very rare” and reflects extreme moves. He also cited stretched prices relative to 200-day moving averages. Still, valuations have not expanded sharply: the Philadelphia Semiconductor Index trades at about 26.5 times forward earnings, versus an average of 26 times at the end of 2025, according to Dow Jones Market Data.