Nasdaq gained 32% in H1 2023, its best first half since 1983's 37% rise; Nvidia is up 195%+, Meta is up 130%+, Apple and Amazon are up 50%+, Alphabet is up 34%+
Ari Levy / CNBC :
Context & Ripple Effects
This closes a round trip: after the Nasdaq's 33% plunge in 2022, the index just posted its best first half since 1983, with the rally concentrated almost entirely in the mega-cap names. The move was already visible by late May, when Microsoft, Alphabet, Amazon, Meta, Tesla, Apple, and Nvidia had gained a median 43% for the year — nearly 5x the S&P 500 — on AI optimism.
What makes this half notable is who did the lifting: Nvidia up more than 195% and Meta up more than 130%, with Apple and Amazon above 50%, means a handful of stocks account for most of the index gain.
First-order effects
- Nvidia and Meta enter the second half as the year's defining winners, their valuations now anchored to AI expectations rather than prior-year fundamentals; Apple and Amazon's 50%+ gains restore them to leadership positions they lost in 2022.
Second-order effects
- Index-tracking money concentrates further: the same six names later reach 30% of the S&P 500, so passive portfolios are effectively levered to the AI trade whether or not investors chose it.
- Rival indices and active managers face a benchmarking problem — matching the Nasdaq now requires holding an increasingly narrow basket, pressuring diversified strategies to chase the same names.
Third-order effects
- Market structure tilts toward AI-infrastructure dependence: when policy shocks hit, the whole index moves with these few stocks, as seen when the Nasdaq jumped 12%+ on the 2025 tariff pause with Nvidia up 18.7% — concentration cuts both ways.
- If the pattern holds, equity performance and AI capex cycles become inseparable, making the 'AI infrastructure supercycle' the central variable for index-level returns rather than one sector story among many.
The trend: US equity returns are consolidating around a handful of AI-driven mega-caps, turning index performance into a bet on the AI infrastructure buildout.