Trump’s Bull Market Is Standing on Shaky Legs. Just 5 Stocks Account for 52% of the S&P’s Gains

President Donald Trump has had little trouble pointing to Wall Street as evidence his second term economy is working. Since Inauguration Day on Jan. 20, 2025, the S&P 500 has climbed more than 22%, according to Bloomberg market data, and nearly 48% from the sharp lows hit during the April 2025 tariff-driven selloff. On the surface, that’s the kind of rally every president wants attached to their name.

But here’s the question savvy investors should be asking: How healthy is this bull market if only a handful of stocks are doing most of the lifting? The answer matters because narrow rallies often look stronger than they really are. And right now, the market’s foundation appears far thinner than the headline numbers suggest.

The AI Boom Is Carrying the Market

Let’s start with what is working. Artificial intelligence spending continues to flood into the technology sector at a pace few expected even a year ago. Microsoft (NASDAQ:MSFT | MSFT Price Prediction), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG), and Meta Platforms (NASDAQ:META) are together projected to spend some $725 billion on AI infrastructure in 2026. That spending wave has created enormous demand for semiconductors powering data centers, AI training, and cloud computing.

The result has been a powerful rally in chip stocks. The PHLX Semiconductor Index has soared 68% this year, or eight times the gains of the S&P 500, and is up 124% over the past two years. Semiconductor stocks now account for more than one-fifth of the broad market index’s market cap, representing 23% of the total.

Bloomberg data shows the S&P 500 has gained 536 points year to date in 2026 — roughly an 8% increase. Yet 51.6% of those gains came from just five semiconductor companies:

Regardless of how you look at it, that’s a remarkably concentrated market.

Even more striking, all five companies sit directly at the center of the AI spending boom. Demand for GPUs, high-bandwidth memory, networking chips, and AI accelerators has expanded far faster than demand in most other sectors of the economy.

That has created a market where semiconductor stocks are masking weakness elsewhere.

The Rest of the Market Isn’t Keeping Up

Here’s what the numbers tell us: if five stocks generated 51.6% of the S&P 500’s gains, the remaining 495 companies accounted for just 48.4%.

That’s not the sign of a broad-based bull market fueled by widespread economic strength. It’s the sign of a rally becoming increasingly dependent on a narrow theme.

Granted, concentrated leadership isn’t unusual during major technology shifts. The dot-com boom of the late 1990s also saw capital crowd into a relatively small group of market leaders. The difference is that today’s valuations are already elevated while interest rates remain far above the near-zero environment that fueled prior speculative runs.

While Nvidia now trades at roughly 19 times forward earnings and Micron 7; Broadcom trades near 23 times forward earnings; AMD, 31 times, and Intel 71. Investors are effectively betting that AI demand will continue accelerating for years.

That said, concentration creates fragility. If even one or two of these names disappoint on earnings, reduce guidance, or face export restrictions, the broader market could feel the impact quickly.

Surprisingly, the rally’s narrowness may also signal investors are becoming more defensive beneath the surface. Money appears to be clustering in the perceived “must-own” AI names rather than spreading across industrials, consumer stocks, financials, and small-cap companies.

Tax Cuts and Deregulation Only Go So Far

Trump’s tax and deregulation agenda has also helped support investor enthusiasm. Financial stocks initially rallied on expectations for lighter regulation, while energy and industrial companies benefited from hopes of reduced compliance costs. But earnings growth outside big tech has remained uneven.

According to S&P Global earnings data, communication services and technology sectors continue to outpace nearly every other segment of the market in profit growth. Meanwhile, many consumer discretionary, utility, and real estate companies continue grappling with higher borrowing costs and slowing demand.

In any case, when market gains become this concentrated, history suggests investors should pay attention.

Key Takeaway

In short, Trump’s bull market remains powerful — but also looks increasingly top-heavy.

The AI boom has created real winners, and companies like Nvidia, AMD, Broadcom, Micron, and Intel are benefiting from one of the largest technology infrastructure buildouts in decades. Strong corporate earnings and pro-business policies have added fuel to the rally.

But when just five stocks account for more than half the market’s gains, investors should recognize the risk beneath the surface.

That doesn’t mean a crash is imminent. It does mean this rally may not be as durable as the headline numbers imply. Smart investors should keep an eye on market breadth, not just index levels, because when all is said and done, healthy bull markets usually need more than five stocks carrying the load.