Wednesday's Market Minute: Betting On Six-Pack of Tech

Tech earnings will be at the forefront of investors’ minds Wednesday, as big tech names will begin reporting after-the-bell, beginning with Tesla and Microsoft. When it comes to the Nasdaq-100’s price activity, tech names dictate much of the movement. Apple Inc AAPL, Microsoft Corporation MSFT Amazon.com Inc AMZN, Alphabet Inc GOOG GOOGL, Facebook Inc FB, and Tesla Motors Inc TSLA now account for nearly half of the value of the Nasdaq-100. As of Wednesday, Apple makes up 12.0%, Microsoft makes up 11.3%, Amazon makes up 11.2%, Facebook 4.2%, Alphabet (Class A) 3.8%, Alphabet (Class B) 3.8% and Tesla makes up 2.7% of the major index. The rest of the 100 names within the Nasdaq-100 accounts for roughly 51%.

All six names remain positive on the year despite the broader market uncertainties. Tesla is up nearly 275% YTD, Amazon is up almost 70% YTD, Microsoft and Apple are up over 32% YTD, Facebook is up nearly 18% YTD, and Alphabet is up roughly 16% YTD. This contributes to the Nasdaq-100 outperforming the broader Nasdaq composite and the S&P 500 index on a one-year, three-year, five-year, and 10-year basis.

And these big tech names are not only outweighing the Nasdaq-100. The concentration of each major indices’ market cap is skewed by some of these tech giants. The S&P 500 receives roughly 22% of its value from those five companies, not including Tesla. This is up from over 17% just a few months ago. These six names now account for nearly 41% of the Nasdaq Composite Index.