From Financial Modeling Prep: 2025-01-09 02:35:59

Barclays warns of market concentration risk in U.S. equities for 2025, with mega-cap tech companies dominating and limiting market upside. Top 10 stocks in S&P 500 make up 29.3% of index weight, with Nvidia contributing 5.4% of total returns in 2024.

Despite attempts to broaden market performance, declines in Materials and Healthcare sectors in late 2024 offset progress. Sectors like Technology, Media, and Financials outperformed, providing balance to top-heavy market.

Market concentration poses risks like limited diversification, restrained upside, and EPS dependency on mega-cap tech companies. Diversified approach and sector analysis tools are recommended for investors to navigate market challenges and identify growth opportunities in 2025.



Read more at Financial Modeling Prep:: Market Concentration Continues as Key Risk in 2025