S&P 500 Hits New Highs, But a Bespoke Cut Suggests Microsoft and Nvidia Are Skewing the Picture

The S&P 500 has continued to press to new highs, but analysts at Bespoke Investment Group argue that the rally is being carried disproportionately by just two stocks, Microsoft and Nvidia. In a market-focused write-up published on Aug. 30, the piece notes that stripping out the influence of those companies changes the tone of what the index’s ascent implies about underlying market health.

The core claim is not that the index’s gains are imaginary, but that their composition matters. According to the article, Bespoke’s latest earnings-based assessment suggests that the two technology leaders are doing much more work than is typical in a healthy bull market, where a wider set of companies contributes to gains. The analysis frames Microsoft and Nvidia as the primary drivers behind the index’s momentum rather than a sign that earnings strength is broadly distributed.

Bespoke’s approach, as described in the write-up, ties the “who is carrying what” question to earnings data, meaning the evaluation aims to connect stock performance to corporate fundamentals rather than solely to price action. The article stops short of laying out a full methodology in the excerpt available here, but the thrust is clear: removing Microsoft and Nvidia reveals a market that is less uniformly strong.

For Microsoft, the takeaway is that its market weight and earnings impact are magnifying any positive read-through from its cloud, software, and artificial intelligence-related business lines. In the background, Microsoft continues to frame its strategy around cloud computing and AI across its product suite, with frequent updates via its corporate newsroom. For Nvidia, the same concentration dynamic applies, given its central role in the semiconductor and data center supply chain tied to AI build-outs.

The broader market context is that mega-cap concentration has been a recurring feature of U.S. equities in recent years, but the article’s emphasis is on how stark that concentration can look in earnings terms. When only a pair of companies accounts for a large share of incremental strength, investors can end up with an index that moves higher even if the median stock’s results are more mixed.

In practice, this kind of concentration can affect both risk perceptions and expectations about future upside. If Microsoft and Nvidia deliver continued earnings and guidance that meet or exceed expectations, the index can keep rising even if other sectors lag. If either company’s results disappoint or if growth expectations reset, the impact could be outsized because so much of the market narrative is concentrated in their performance.

The article does not provide, in the information available here, specific figures for “carrying” contributions, such as exact percentage impacts, earnings revisions, or a quantified breadth measure after removing the two names. It also does not specify whether Bespoke’s assessment is based on year-over-year comparisons, forward estimates, or a particular earnings season window. Those details would be important for readers trying to translate the argument into a measurable gauge of market breadth.

What to watch next is whether additional companies broaden their participation as the market digests new earnings and guidance, or whether the index remains increasingly dependent on Microsoft and Nvidia to sustain momentum. Investors and analysts will likely focus on whether the earnings contribution gap narrows, and whether other sectors show signs of catching up as cloud and AI-related spending continues to evolve.