Top 5 S&P 500 Stocks by Index Weight

In this article, we discuss the top 5 S&P 500 stocks by index weight. If you want to read our detailed discussion on the stock market and the S&P 500 index, click Top 30 S&P 500 Stocks by Index Weight. 

5. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 82

Index Weight: 2.018166%

Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) ranks 5th on the S&P 500 index. Billionaire Ron Baron is a Tesla bull who expects the stock to reach $1500 by 2030. At the end of Q1 2023, Baron’s hedge fund owned 17.6 million shares of Tesla, Inc. (NASDAQ:TSLA) worth $4.5 billion. Ron Baron personally owns 5 million shares of Tesla.

Baron Opportunity Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2023 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”

4. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 132

Index Weight: 2.957218%

NVIDIA Corporation (NASDAQ:NVDA), the American semiconductor firm, ranks 4th on the S&P 500 index by weight. On June 14, 2023, NVIDIA Corporation (NASDAQ:NVDA)’s market cap exceeded $1 trillion, supported by the AI boom. The company also announced its plans to release multiple AI-based products and services at the end of May. 

According to Insider Monkey’s first quarter database, 132 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), compared to 106 funds in the earlier quarter. Rajiv Jain’s GQG Partners is a prominent stakeholder of the company, with 8.2 million shares worth $2.3 billion. 

Saltlight Capital made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2023 investor letter:

“In May 2021, we shared our thoughts on AI with a particular focus on NVIDIA Corporation (NASDAQ:NVDA), expressing our belief that it was poised to become a significant enabler of AI technology. At the time, it felt like our insights were being carried away by the wind.

Our thesis hinged on the idea that NVIDIA’s GPUs would form the fundamental computing hardware for neural networks. This hardware would not only develop AI tools and infrastructure but also democratize access to AI technology.

At the end of that letter, we included a substantial excerpt from an interview with NVIDIA’s CEO, Jensen Huang. Looking back, his words now seem eerily prophetic. He suggested, albeit vaguely, a solution to the complexity problem. He said:

“But finally, we have this piece of this new technology called artificial intelligence that can write that complex software so that we can automate it. The whole goal of writing software is to automate something. We’re in this new world where, over the next 10 years, we’re going to see the automation of automation””…(Click here to read the full text)

3. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 243

Index Weight: 3.064611%

Amazon.com, Inc. (NASDAQ:AMZN) ranks third on the S&P 500 index by weight. On June 22, Amazon.com, Inc. (NASDAQ:AMZN) announced that it will invest $100 million in AWS Generative AI Innovation Center, an initiative to support users in building and employing generative artificial intelligence solutions in their businesses. 

According to Insider Monkey’s first quarter database, 243 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN), compared to 240 funds in the earlier quarter. Boykin Curry’s Eagle Capital Management is a prominent stakeholder of the company, with 15.6 million shares worth $1.62 billion. 

Here is what Baron Durable Advantage Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2023 investor letter:

“Amazon is probably the best example of a company that was built with an ability to rapidly adapt to change from its very inception. We have written a lot over the years about how Amazon’s culture and organizational structures prioritize and enable rapid innovation. Historically, programming code was written in a sequential waterfall fashion, creating significant interdependencies between different developer teams in the organization and slowing down innovation. Amazon famously required all developers to expose their work externally via standardized Application Programming Interfaces (APIs). A novel and risky approach, it enabled development teams to work in parallel, created a rapid feedback loop with customers, and turned Amazon into one of the most innovative companies in the world. The culture of constant experimentation and the willingness to take risks and fail fast (remember the Amazon Fire phone?) became the core pillars of the company’s culture and led to revolutionary ideas like third-party sales (letting competitors sell similar products alongside your own), Amazon Prime Video, and Amazon Web Services (AWS), making the company a disruptor and leader in multiple multi-trillion-dollar industries.”

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 289

Index Weight: 6.860771%

Microsoft Corporation (NASDAQ:MSFT) is the secondest largest S&P 500 stock, with an index weight of 6.86%. On June 14, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.68 per share, in line with previous. The dividend is payable on September 14, to shareholders of record on August 17. 

According to Insider Monkey’s first quarter database, Microsoft Corporation (NASDAQ:MSFT) was part of 289 hedge fund portfolios, compared to 259 in the earlier quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with a position worth $11.3 billion. 

Here is what Baron Durable Advantage Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:

“Baron Durable Advantage Fund focuses on businesses with these characteristics. Microsoft, our largest holding, is a good case study of a business’s ability to adapt and pivot after years of suffering the consequences of a stale management team that was resting on its laurels. The company’s de facto monopoly position (Microsoft Windows + Office) in enterprise desktop and worker productivity suites in the client-server world made the company complacent and reluctant to take risks and continue to innovate. The stock languished for almost 15 years while Apple, Amazon, Google, and Facebook led the transition to mobile. Satya Nadella finally took the reins in 2014 and immediately changed the company’s focus from the Windows-centric, on-prem legacy businesses to a cloud-first platform that could be accessed and used from any (mobile) device anywhere in the world. He also made the decision to open the platform to third parties, such as Linux, even though it was likely to hurt Microsoft’s core Windows franchises. Nadella was willing to risk the high-margin on-prem business, recognizing that the world was going to change, and that cloud computing was going to be the future. This bold decision (and a massive multi-year investment) has reinvigorated the company and its stock, with Microsoft Azure, its cloud infrastructure business, surpassing $55 billion in annualized recurring revenue in the last quarter, while still growing 38% year-over-year. The price of Microsoft stock has increased seven-fold since Satya Nadella took over as CEO.”

1. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 131

Index Weight: 7.466181%

Apple Inc. (NASDAQ:AAPL) is the top S&P 500 stock, with an index weight of 7.46%. On May 4, Apple Inc. (NASDAQ:AAPL) reported a FQ2 GAAP EPS of $1.52 and a revenue of $94.84 billion, outperforming Wall Street estimates by $0.09 and $2 billion, respectively. The board of directors also authorized the repurchase of up to $90 billion of Apple Inc. (NASDAQ:AAPL)’s common stock.

According to Insider Monkey’s first quarter database, 131 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), compared to 135 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 915.5 million shares worth nearly $151 billion. 

Silver Ring Value Partners made the following comment about Apple Inc. (NASDAQ:AAPL) in its Q1 2023 investor letter:

“Exited the Apple Inc. (NASDAQ:AAPL) put options position, as I came to the conclusion that I was wrong about the degree to which the stock is overvalued. While I still believe it’s optimistically priced, the fundamentals over the last few years made me believe that my initial decision to buy the put options was wrong.”

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