The Technology Select Sector SPDR Fund, better known by its ticker XLK, just pulled off something it has never done before. Over a nine-week stretch, the fund outperformed the S&P 500 by 28 percentage points, marking the largest gap between the tech-heavy ETF and the broader index in the fund’s history.
While the S&P 500 posted modest gains in the single digits to low teens on a year-to-date basis, XLK surged to returns in the range of 28.5% to 32.9% by mid-June 2026.
AI is doing the heavy lifting
XLK’s top holdings read like a who’s-who of the AI arms race. Nvidia, Apple, and Microsoft collectively make up a massive chunk of the fund’s weight, and all three have been direct beneficiaries of what can only be described as an AI spending bonanza across corporate America and beyond.
Nvidia’s chips are the infrastructure layer for nearly every major AI model being trained or deployed globally. Apple and Microsoft are integrating AI capabilities across their product ecosystems, with Microsoft’s Azure cloud platform serving as a primary distribution channel for enterprise AI tools, while Apple’s on-device AI features have reinvigorated its hardware upgrade cycle.
