NEW YORK – Big Tech stocks are flexing their enormous strength again, after getting knocked around a bit earlier this year.
Apple, Microsoft, Amazon, Google's parent company and Facebook all gave profit reports this week that blew past investors' already high expectations. Apple earned 40% more than what Wall Street forecast.
The reports are forcing the spotlight back onto this group of stocks that dominate the market, especially after they lagged behind earlier this year. Shares of each of the Big Five companies is on pace to rise at least 6.9% for April, and the majority are on track to more than double the S&P 500's 5.2% rise during the month.
The financial results give some validation to investors who bid up the stocks through the pandemic on expectations they'd weave themselves deeper into everyone's lives, even as the broader economy collapsed around them. Amazon's $108.5 billion in sales last quarter helps show that it “is emerging from the pandemic in an even stronger position than it was before,” UBS analysts led by Michael Lasser said in a report.
Altogether, the five companies make up 21.6% of the S&P 500's entire market value, according to FactSet.
Investors have increasingly put their money into funds that mimic the S&P 500 and other indexes. That means someone putting $100 into an S&P 500 index fund now is devoting nearly $22 into just five companies.