Here’s a number that should make you do a double-take: the technology sector now represents 37% of the S&P 500’s total market share. That exceeds the approximately 35% peak hit during the dot-com bubble in 2000.
But here’s the twist. Despite the catastrophic collapse that followed that earlier peak, tech stocks have quietly delivered annualized returns exceeding 9% since the bubble burst. The sector’s total market capitalization now sits at a record $29 trillion.
The numbers behind the new tech dominance
The Nasdaq Composite peaked at 5,048.62 on March 10, 2000. What followed was a decline of more than 75% by October 2002, vaporizing trillions in market value.
Fast forward to today, and tech’s share of the S&P 500 has actually surpassed that infamous high-water mark. The current forward price-to-earnings ratio for the S&P 500 sits at roughly 30x, well above the historical average of around 22x.
