7 Companies Are Dominating the Stock Market. Meet the ‘Skinny Bull.’

Seven companies account for 98% of the return of the FT Wilshire 5000 Index.

Michael M. Santiago/Getty Images

About the author: Allan Sloan is an independent business journalist and seven-time winner of the Loeb Award, business journalism’s highest honor.

We seem to be in a bull market or about to enter one. But boy, this is one of the skinniest bulls ever, with a mere seven companies (and a total of eight stocks) accounting for more than the entire 9.65% total return (including price gains and reinvested dividends) that the

S&P 500

had for the first five months of the year. That’s an annualized return of more than 23%, which is very nice. 

But without the Select Seven, the S&P is down slightly for the first five months. 

And wait, there’s more. As you can see from the table below, those seven companies represent an astounding 98% of this year’s return for the entire 3,480-company U.S. stock market, as measured by the

FT Wilshire 5000 Index

The Skinny Bull

Just seven companies produced 98% of the FT Wilshire 5000’s return.

Stock Wilshire Market Weight Return Contribution
Apple 6.88% 2.04%
Microsoft 5.88% 1.76%
Nvidia 2.19% 1.48%
Alphabet* 3.37% 1.04%
Amazon 2.67% 0.88%
Meta 1.45% 0.87%
Tesla 1.35% 0.57%
Total 23.79% 8.64%
Wilshire Total 100% 8.84%

Note: Alphabet includes A and C stock combined. Returns through May 31, 2023.

Source: Wilshire Indexes

I’m using the Wilshire because it’s a much bigger, much broader indicator than the S&P. And it gets a lot less attention because unlike the S&P, the Wilshire doesn’t have trillions of dollars indexed to it. 

That 98% piece of the return is more than four times the companies’ combined month-end index weight of a bit under 24%. 

And get this: in May, Nvidia, whose month-end weight was a mere 2.19% of the index, accounted for more than the index’s entire gain. According to statistics that I got from Wilshire Indexes, Nvidia’s 36% May return boosted the Wilshire by 0.59%, which exceeded the index’s 0.43% return for the month. 

What on earth is going on here? And how can we cope with it?

In search of wisdom and a bit of context, I talked and emailed with Philip Lawlor, Wilshire’s managing director for market research. I asked Lawlor, who has more than 30 years of experience as an investment strategist and a money manager, what investors can do about the fact that the market’s substantial gains are so narrowly focused. 

The problem, of course, is that with so few stocks accounting for so much of a substantial gain, it’s easy to miss out even if you put your money into this year’s hot areas: digital information and services, and technology. These areas had returns of 31.9% and 39.6%, respectively, for the first five months of the year, about four times the Wilshire’s 8.84% return.

“You could have backed the wrong horses even if you picked the right sector,” Lawlor told me. 

That makes things especially difficult for active money managers, whose goal is to pick individual stocks that allow them to beat the market. Miss out on Nvidia—this year’s scorching hot stock, which returned 159% through May and kept rising in June when last I looked—and your portfolio is almost sure to have a below-market return. 

But for those of us who are retail investors, there are other approaches than hoping that we don’t miss picking the market’s hotties du jour.

If broad-based index funds (my biggest personal equity investments) bore you but this year’s hot market sectors intrigue you, Lawlor says that you can buy into technology or semiconductor exchange traded funds.

Please note that Lawlor isn’t advising you to do that—he’s just offering you options.   

With a sector ETF, you can get a piece of stocks like





the three hottest big stocks for the year through May, along with other stocks like



(formerly Facebook) and


(formerly Google) that could become this week’s hotties. If you pick the right ETF, you might find one that also has


another of our Select Seven companies.

By going the ETF route, Lawlor says, “you don’t have to cherry pick individual stocks.”

Sure, buying sector ETFs isn’t as much fun as hitting a grand slam with Nvidia. But it reduces the chances of getting your head handed to you if the market suddenly sours on Nvidia. Its earnings have been soaring thanks to its huge share of the market for chips that power artificial intelligence applications. 

If the rapid rise of a handful of enormous stocks reminds you of the 1999-2000 Internet bubble, you’re not alone.

At the peak of the bubble in March of 2000, Lawlor says, the 10 biggest stocks accounted for 20.3% of the Wilshire. As of May 31, the Top Ten accounted for 25.9% of the index. That’s a serious concentration. 

I don’t know if the Skinny Bull Market will flesh out, or whether it will get even skinnier. It’s going to be a lot of fun to watch. But it won’t be a lot of fun if you decide to go all in and don’t have the emotional or financial staying power you’ll need if the Skinny Bull morphs into a Big Bad Bear.

So enjoy the bull run. But remember that in the financial markets, nothing lasts forever.

Guest commentaries like this one are written by authors outside the Barron’s and MarketWatch newsroom. They reflect the perspective and opinions of the authors. Submit commentary proposals and other feedback to ideas@barrons.com.