Top 10 S&P 500 Stocks by Index Weight

Founded in 1957, the Standard and Poor’s 500, or S&P 500, is a stock market index that tracks the stock performance of major businesses. As the name suggests, it features 500 of the largest companies listed on stock exchanges in the United States.

Due to its size, the S&P 500 is one of the most popular indexes in the finance world. To be listed on the index, American companies must meet criteria including market capitalization, liquidity and positive earnings in the most recent quarter. If businesses fall below the standards for inclusion on the S&P 500, they may be removed from the index.

With such big players on the S&P 500, each company’s performance affects the broader market.

In this guide, you will learn the top 10 S&P 500 stocks, why market weighting is important and what to consider when investing in these stocks. You will also get answers to frequently asked questions.

Best Brokers to Invest in S&P 500 Stocks

If you are considering investing in S&P 500 funds, it is important that you choose a broker that meets your needs.

1. Plus500
2. eToro
3. Interactive Brokers

Plus500 is a user-friendly broker that offers access to S&P 500 stocks through its Contracts for Difference (CFD) trading. While it does not provide direct stock ownership, it allows traders to speculate on the price movements of S&P 500 companies without owning the underlying assets. This makes it an appealing option for those looking to actively trade S&P 500 stocks rather than hold them long-term.

The platform features competitive spreads, fast execution speeds, and a range of technical analysis tools, which are crucial for making informed decisions when trading high-volume stocks like those in the S&P 500. Traders can also use risk management tools, such as stop-loss and take-profit orders, to safeguard their investments in this fast-paced market.

Additionally, Plus500’s demo account provides a risk-free environment to practice trading strategies, and its intuitive interface ensures that both beginners and experienced traders can easily navigate the platform. Regulated in multiple jurisdictions, Plus500 is a reliable choice for those interested in short-term trading of S&P 500 stocks.

eToro is a versatile broker that stands out as an excellent platform for investing in S&P 500 stocks, catering to both beginners and experienced investors. Unlike some brokers, eToro allows users to buy shares directly, enabling long-term investment in the leading companies within the S&P 500.

One of eToro’s unique features is its social trading platform, which allows users to observe and copy the portfolios of experienced investors who specialize in S&P 500 stocks. This feature is particularly beneficial for beginners who want to learn and build confidence in their investment strategies.

eToro’s intuitive interface makes researching and investing in S&P 500 stocks straightforward. Users can access real-time market data, advanced charting tools, and customizable watchlists to track the performance of companies within the index. Additionally, eToro offers commission-free trading for stocks, ensuring cost-effective access to the S&P 500.

For those who prefer to test strategies before committing real money, eToro provides a demo account. Combined with its educational resources and a community-driven approach, eToro is a strong choice for anyone looking to invest in the S&P 500.

51% of retail investor accounts lose money when trading CFDs with eToro. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Interactive Brokers (IBKR) is a top choice for investors and traders looking to invest in S&P 500 stocks due to its comprehensive offerings, competitive pricing, and access to global markets.

Interactive Brokers is renowned for its low commission structure. For U.S. equities, including S&P 500 stocks, IBKR offers commission-free trading for its IBKR Lite accounts and extremely competitive rates for IBKR Pro users, making it cost-effective for both retail and institutional investors.

With IBKR, investors can buy fractional shares, which is ideal for those looking to invest in high-value S&P 500 stocks without needing large amounts of capital. This feature helps diversify portfolios even with a modest budget.

The Trader Workstation (TWS) platform is one of the most advanced in the industry, featuring:

• Real-time market data and news
• Advanced charting tools with customizable indicators
• Risk analysis and portfolio optimization tools
• Algorithmic trading options

These tools are especially useful for active traders who need in-depth analytics to make informed decisions about S&P 500 stocks.

Interactive Brokers offers access to over 150 markets globally, allowing investors to trade S&P 500 stocks alongside other international equities, ETFs, and financial instruments. This makes it a great option for diversifying beyond U.S.-based assets.

As a well-regulated broker with a strong reputation for reliability, Interactive Brokers provides peace of mind for investors seeking a safe platform to trade S&P 500 stocks.

What Is the S&P 500 and Why Does it Matter?

The Standard & Poor 500 is an index of 500 leading publicly traded companies operating in the United States. It is considered to be an accurate representation of the overall US stock market thanks to its wide scope.

Featuring 500 large-cap companies compared to just 30 on the Dow Jones, the S&P index is often used as a benchmark for the broader economy.

Each of the companies on the S&P 500 are weighted differently, depending on its market capitalization. A company’s market capitalisation, or market cap, demonstrates how much a company is worth. It is determined by the total stock market value of all outstanding shares.

A company with a larger market cap is weighted more heavily. For this reason, any share price movements, positive or negative, are much more impactful on the structure of the index.

The S&P 500 tracks roughly 80% of the total market cap of US public companies. The top five companies on the S&P 500, ordered by weight percentage, are Nvidia, Apple, Microsoft, Amazon and Tesla.

Investing in the S&P 500 can help investors earn good returns. It is also a more reliable approach than active investing and trying to time the market for the best investments.

However, solely focusing on this one index can leave you exposed to numerous unexpected downfalls.

With any investing, you should consider diversifying your portfolio to minimize risk. In the event that the S&P 500 took a major hit, your entire investment portfolio would be significantly affected.

Even smaller economic downturns can incur large losses and undermine your investment.

Why Market Weighting Is Important in the S&P 500

The S&P 500 is a capitalization-weighted index, meaning that each company listing is weighted in relation to its total stock market value.

To list each company correctly, the S&P 500 multiplies the share price of the company by the total number of shares outstanding on the stock market.

The nature of the S&P 500 weighting means that the index allocates higher concentrations to larger companies. An equal weighted index provides more exposure to smaller companies.

This means that large-cap stocks have a disproportionate influence on the performance of the index. There is a group of major technology companies on the S&P 500, nicknamed the Magnificent Seven due to their consistent outperformance of the broader market. These dominant players are Apple, Microsoft, Amazon, Alphabet (parent company of Google), Tesla, Meta and Nvidia.

If one of these seven companies performs well, it can disproportionately drive the overall performance of the S&P 500 index.

Passive investing is an approach in which securities are automatically selected to match an index, rather than being chosen by a portfolio manager. A type of passive investing is exchange-traded funds, or ETFs. These assets have more flexibility than mutual funds and can be bought and sold at various prices throughout the day.

If you are investing in an index fund or ETF that benchmarks to the S&P 500, you will benefit from exposure to all listed stocks.

Top 10 S&P 500 Stocks by Index Weight 2024

Before investing in funds listed on the S&P 500, it is important that you understand how companies are listed on the index.

Here, the top 10 S&P 500 stocks are broken down by market capitalization, as of 2024.

The nature of the stock market is that these weights can fluctuate, and so this list represents a snapshot of the top 10 companies.

1. Apple Inc. (AAPL)

Weight: ~7.1%

Tech giant Apple, known for its huge range of smartphones, tablets and wearable tech, is the largest S&P 500 stock.

Launched in 1976 and with a market cap of $2.75 trillion, Apple has revolutionized the technology sector with its iconic and innovative products, and its impact on the tech sector.

2. Microsoft Corporation (MSFT)

Weight: ~6.2%

Since its creation in 1975, Microsoft has cemented itself as a major technology company.

Its cloud-centric architecture and renowned Office software provides an agile and resilient experience for its 345 million users across the globe.

3. Amazon.com Inc. (AMZN)

Weight: ~3.3%

The e-commerce business has always adopted a customer-centric approach. This feature has allowed Amazon to go from an online bookstore to a huge marketplace that sells practically anything you can imagine.

In addition to Amazon’s dominance in the retail sector, the company also runs a cloud business that provides a robust suite of tools for hosting, machine learning, data storage and much more.

4. NVIDIA Corporation (NVDA)

Weight: ~2.5%

Industry leader NVIDIA, founded in 1993, designs a unique programmable computer chip that provides cutting-edge graphic processing units (GPUs) applications.

NVIDIA launched its most recent innovation in 2022: the Omniverseä platform. This system is key for building and operating metaverse apps.

5. Alphabet Inc. (GOOGL)

Weight: ~2.1%

Parent company of Google and YouTube, Alphabet is a dominant player in digital advertising.

The company accounts for almost one-half of global online advertising spend. In 2020, Alphabet’s marketing revenue increased by $12.1 billion.

6. Berkshire Hathaway Inc. (BRK.B)

Weight: ~1.5%

Berkshire Hathaway is a massive holding company for a number of businesses including GEICO and Fruit of the Loom.

Run by chair and CEO Warren Buffett, Berkshire Hathaway has a strong, diverse business portfolio. Should an industry experience decline, the company can quickly expand to new products and revenue streams.

Berkshire Hathaway has a market cap of over $700 million.

7. Tesla Inc. (TSLA)

Weight: ~1.3%

Founded in 2003, today Tesla is a major player in the electric car market. The company garnered worldwide attention in 2012 when it released its flagship car, the Model S.

Tesla boasts a market cap of $571 billion.

8. UnitedHealth Group (UNH)

Weight: ~1.2%

UnitedHealth Group, Inc. provides healthcare coverage, data consultancy and software services.

The company is a major leader in healthcare services and insurance and serves over 140 million people across the world.

It has a market cap of $545 billion.

9. Johnson & Johnson (JNJ)

Weight: ~1.1%

With more than 130,000 employees across the globe, Johnson & Johnson advocate for good health for all.

Established in the 1880s, the company strives to improve the accessibility and affordability of healthcare. Johnson & Johnson work to prevent and cure diseases and create more effective treatments.

10. Procter & Gamble Co. (PG)

Weight: ~1.0%

Known for consumer goods such as laundry, cleaning and cosmetic products, P&G have been operating since 1837.

The company took up a huge market share and in 2022 raked in sales of over $80 billion worldwide.

Proctor & Gamble has a market cap of $399 billion.

What to Consider When Investing in S&P 500 Stocks

If you are thinking of investing in S&P 500 Stocks, there are several things you need to consider.

Investing in index funds can be very lucrative, and the S&P 500 can be an exciting platform with its sky-high market caps.

There are a few ways to invest in stocks that are listed on the S&P 500, so you can choose the approach that best suits you and your goals.

The simplest way is to invest through a S&P 500 index fund. These funds track the movement of the S&P 500, offering exposure to the companies without the effort of purchasing individual stocks.

This method also diversifies your portfolio, which can help reduce risk. With an index fund, you do not need to be an expert on the history and performance of specific companies.

You can also invest by purchasing individual S&P 500 stocks. Unlike index funds, this would require research and careful stock-picking skills. Investing in individual stocks also comes with higher risk. However, the payoff is greater, and this method can offer higher returns.

If you want a cost-effective way to invest in the S&P 500, you can opt for an ETF. As ETFs are passively managed, they often come with low fees. They still provide exposure to top companies and allow you to own several shares with just one investment.

Some of the most popular S&P 500 ETFs that track these stocks are Vanguard S&P 500 UCITS ETF, iShares Core S&P 500 UCITS ETF USD and JP Morgan US Research Enhanced Index ETF.

Whichever investing approach you choose, it is important you understand the weight of each stock. If you invest in companies with larger market caps, you will benefit from their positive share price movements. This also means that any negative movement can affect your investment.

Frequently Asked Questions

Final Thoughts on the Top S&P 500 Stocks

Featuring the biggest and most successful American companies, the S&P 500 index is a platform that could help diversify your portfolio. It has the potential to bring you huge returns, but it is not without risk.

If you wish to invest in S&P 500 funds, ensure you understand the significance of index weight. This is crucial so you make the right investment decisions and minimise loss. You will also need to consider risk management and choose an investing approach.

If you are a beginner investor, or are unsure which investment style to opt for, consider consulting a financial advisor.