Key Takeaways

• Nvidia (NVDA) is the largest AI stock in the S&P 500 by market capitalization, leading a cohort that now represents a record 45% of the entire index.
• AI-linked equities have gained roughly 20 percentage points of S&P 500 market share since OpenAI launched ChatGPT in November 2022.
• The five biggest hyperscalers — Amazon, Alphabet, Meta, Microsoft, and Oracle — issued $121 billion in U.S. corporate bonds during 2025, more than four times their pre-2025 average.
• AI-tied debt has reached an all-time high of $1.4 trillion, accounting for 15.4% of the U.S. investment-grade market.
• Taiwan’s stock market, dominated by TSMC, has tripled since 2020 and recently overtook the United Kingdom in total market capitalization.
• According to Morningstar’s April 2026 ratings, several of the largest AI names — including Microsoft, Nvidia, Broadcom, and Meta — are trading below fair value estimates.

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The Short Answer: Nvidia Leads the Pack

Nvidia is currently the heaviest weight among AI stocks in the S&P 500, and it sits atop a group that has rewritten the index from the inside out. The chipmaker’s lead comes from its grip on graphics processing units, the proprietary CUDA software stack, and a networking business that ties GPU clusters together for AI training. Morningstar analyst Brian Colello rates Nvidia with a wide economic moat and a fair value estimate of $260 per share, with the stock trading roughly 22% below that mark as of late April 2026.

Behind Nvidia, the S&P 500’s AI-linked giants include Microsoft, Broadcom, Meta Platforms, Oracle, and a handful of others that together account for an unprecedented share of America’s flagship equity index. AI-linked stocks now make up 45% of the S&P 500’s total market capitalization, according to data compiled by The Kobeissi Letter — a 20-percentage-point jump since ChatGPT’s debut in November 2022.

How AI Took Over the S&P 500

The concentration is not a quiet trend. As The Kobeissi Letter put it: “Never before has a single theme dominated both US equity and credit markets to this magnitude.”

Two forces explain the surge. First, hyperscalers are pouring capital into chips, data centers, and model development at a pace that boosts both their own valuations and those of their suppliers. Second, the credit market is funding the buildout. AI-linked debt now stands at $1.4 trillion, nearly double the 2020 figure, and represents 15.4% of the U.S. investment-grade bond market — the largest single segment.

The bond issuance pattern tells the story plainly. Between 2020 and 2024, Amazon, Alphabet, Meta, Microsoft, and Oracle averaged about $28 billion in combined annual U.S. corporate bond issuance. In 2025 alone, the five issued $121 billion.

The Biggest AI Stocks in the S&P 500

The table below summarizes the largest and most analyst-followed AI names in the index, based on Morningstar’s April 2026 coverage and fair value estimates.

Two non-U.S. names — Taiwan Semiconductor Manufacturing (TSM) and Tencent (TCEHY) — also appear on Morningstar’s broader AI list, though they are not S&P 500 constituents. Their inclusion underscores how the AI trade extends well beyond the index itself.

Nvidia: The Anchor of the AI Trade

Nvidia’s dominance rests on parallel processing. Its GPUs run thousands of cores simultaneously, which suits the matrix-heavy math that powers large language models. Conventional CPUs, designed for sequential work, can’t keep up with that workload at scale.

The company’s moat extends past silicon. CUDA, Nvidia’s proprietary software platform, has become the default toolkit for AI developers, and the switching costs for moving code off it are steep. As Colello notes, hyperscalers continue to develop in-house alternatives, and AMD is pushing its own GPU and AI accelerator roadmap, but these efforts have so far chipped at — rather than dislodged — Nvidia’s lead. Nvidia’s expansion into networking equipment for GPU clusters has further cemented its position in AI training infrastructure.

Microsoft: The Cloud-Plus-OpenAI Wager

Microsoft holds a five-star Morningstar rating and a fair value estimate of $600 per share, the highest absolute target on the list. Its AI exposure is anchored by its multibillion-dollar investment in OpenAI and by Azure, which Morningstar’s Dan Romanoff estimates is already a $75 billion business growing roughly 30% annually.

Azure benefits from a pre-built customer base. Enterprises already running Windows Server, Office 365, or Dynamics 365 can move workloads to the cloud without leaving the Microsoft environment. That installed base gives Microsoft a softer on-ramp than its rivals enjoy, and the company has bundled AI features into Office 365 to lift average revenue per user.

Broadcom: The Custom-Silicon Beneficiary

Broadcom occupies a different niche than Nvidia. Rather than selling general-purpose AI GPUs, it designs custom AI accelerators for hyperscalers that want to reduce their dependence on a single vendor. Morningstar analyst William Kerwin describes Broadcom as the most important secondary AI compute supplier, with its networking and custom-chip businesses driving the firm’s wide moat.

Outside the chip business, Broadcom owns a portfolio of infrastructure software — virtualization, mainframe tools, and cybersecurity — that came together through acquisitions including the 2023 VMware deal. That software unit produces steady cash flow and offers upselling opportunities into deeply embedded enterprise customers.

Meta: AI Inside the Ad Engine

Meta’s case is less about selling AI and more about using it. With nearly four billion monthly active users across Facebook, Instagram, WhatsApp, and Messenger, the company applies AI primarily to ad targeting — an area where Morningstar’s Malik Ahmed Khan calls the investments “value-accretive.”

The Llama large language model and a consumer-facing chatbot give Meta a second AI track, though the company has yet to articulate a clear monetization path for either. Reality Labs continues to lose money. The advertising side, by contrast, keeps benefiting from the broader shift of marketing budgets toward digital channels.

Oracle: The Surprise AI Infrastructure Player

Oracle’s repositioning as an AI infrastructure provider has been one of the more striking shifts among large-cap software firms. Oracle Cloud Infrastructure has booked rapidly growing AI workloads from customers including OpenAI, Meta, and xAI. Morningstar analyst Luke Yang views OCI as on track to become a leading host for AI training and inference, though Oracle faces real challenges securing enough GPU capacity to fulfill its commitments.

The company’s database business, while no longer the only game in town, remains a cash-flow anchor, and recent multicloud arrangements have extended Oracle Database access to other hyperscalers.

The Concentration Risk Behind the Numbers

The flip side of AI’s dominance is exposure. With 45% of S&P 500 market capitalization tied to a single theme, any pause in AI capital expenditure or monetization could ripple through the broader index. The credit picture amplifies the point: when 15.4% of investment-grade debt is linked to one trade, even modest spread widening would carry index-level consequences.

The global picture sharpens this further. Taiwan’s stock market capitalization has climbed to $4.14 trillion, surpassing the United Kingdom’s $4.09 trillion for the first time. TSMC alone accounts for more than 40% of Taiwan’s market cap, meaning a single foundry now anchors a national equity market larger than Britain’s.

What Investors Should Watch

Three signals matter for tracking whether Nvidia and its peers can sustain their share of the index. The first is hyperscaler capital expenditure guidance: if Amazon, Microsoft, Google, Meta, and Oracle slow their data center buildouts, demand for chips and networking gear contracts. The second is bond market appetite for AI-linked issuance — a cooling there would force hyperscalers to fund AI from cash flow rather than debt. The third is enterprise AI adoption beyond the hyperscalers, which is where companies like Accenture, Snowflake, and IBM stand to benefit.

For now, Nvidia’s perch at the top of the AI stock hierarchy looks secure. The company’s hardware lead, software ecosystem, and networking products give it a structural advantage that competitors are still trying to neutralize. Whether the broader 45% share holds depends less on any single chipmaker and more on whether the AI buildout continues to justify the capital — and the debt — flowing into it.

If you are interested in this topic, we suggest you check our articles:

• The Impact of AI in Stock Market Analysis: How Sentiment Analysis Transforms Investing
• How Reliable and Accurate Are AI Trading Bots?

Sources: Yahoo Finance, Morningstar

Written by Alius Noreika