Stocks, corporate bonds and venture capital are increasingly dominated by a single investment theme, Apollo points out
The AI theme hasn't just cornered the stock market, it has systematically swallowed up corporate credit and venture capital, too.
For decades, the golden rule of investing was simple: Put 60% of your money into stocks for strong returns and 40% into bonds for safety. But according to Torsten Slok, chief economist at Apollo, that classic framework is officially dead.
"The new 60-40 is AI vs. non-AI," Slok wrote in a slide deck shared with MarketWatch.
Exposure to the artificial-intelligence boom has become virtually impossible for investors to avoid. The theme hasn't just cornered the stock market. It has systematically swallowed up corporate credit and venture capital, too.
As a result, many investors who probably intended to hold a diversified portfolio of stocks, bonds and alternatives may not be aware of just how heavily leveraged they are to AI.
The 10 largest companies in the S&P 500 SPX already make up about 40% of the capitalization-weighted index's value, Slok pointed out.
Among the 10 largest companies in the index, nine have businesses that are tied to AI, with the lone exception being drugmaker Eli Lilly $(LLY)$. Similar levels of concentration can be found in foreign stock markets as well, most notably emerging markets, where a handful of semiconductor names in Taiwan and South Korea have come to dominate major emerging-market indexes.
Weightings of the top 10 stocks in the S&P 500
Nvidia 7.50%
Apple 6.80%
Alphabet 6.40%
Microsoft 4.20%
Amazon.com 3.90%
Broadcom 2.80%
Meta Platforms 2.50%
Tesla 2.30%
Eli Lilly 1.70%
Micron Technology 1.60%
Source: Apollo
Credit and venture-capital investors are also pouring historic amounts of capital into the theme. In 2026, nearly all net new venture investment has flowed to companies in the AI space. Meanwhile, in the investment-grade bond market - where recent massive debt offerings from companies like Oracle $(ORCL)$ and SpaceX $(SPCX)$ have received a lukewarm reception from investors - AI infrastructure now accounts for nearly half of all net new bond issuance.
AI issuance Non-AI issuance
Investment grade 49% 51%
Venture capital 87% 13%
High-yield 38% 62%
Source: Apollo
Even those who don't own assets are still probably more exposed to the AI investment theme than they realize. If the AI boom falters, the consequences could be felt by investors and ordinary consumers alike. Over the past few years, the race for AI dominance between the U.S. and China has evolved from a popular investment trend into a genuine macroeconomic risk.
Slok said he expects the money pouring into the AI data-center buildout to drive about half of the 2% real GDP growth expected for the U.S. economy in 2026.
The big risk, of course, is that the technology fails to deliver the hoped-for results: a dramatic boost to worker productivity and to corporate profit margins. So far, the only companies that appear to be making money off the technology are those that make the semiconductors and other equipment needed to power and operate AI data centers.
"It needs to be the case that this will generate a lot of productivity gains, a lot of profit margin, a lot of earnings growth - especially for the 493," Slok told MarketWatch in an interview. He was referring to the companies in the S&P 500 that aren't members of the "Magnificent Seven," an elite group with trillion-dollar valuations.
"There's no doubt that the Mag Seven have done well, but at the end of the day, is this going to spill over?" he said.
If the data-center buildout were to slow, the effect of that slowdown in spending could ripple across the economy. Also, a sharp decline in asset values could quickly spill over into the real economy. Since the COVID-19 pandemic, the wealth effect has played an increasingly important role in driving consumption in the U.S.
So far, investor appetite for AI-related assets has remained robust, even as an AI-driven momentum trade has hit the rocks in July, according to Rob Haworth, a senior strategist at U.S. Bank Wealth Management.
The fact that the S&P 500 hasn't seen a bigger pullback suggests that for now, investors are shifting money into other corners of the market, rather than pulling it out of equities entirely, said Mark Hackett, chief market strategist at Nationwide. The index finished Wednesday roughly half a percentage point shy of its most recent record finish in early June.
"Market sentiment is telling you the demand is there, credit spreads aren't widening out, so investors aren't being scared away by all of this debt issuance," Haworth told MarketWatch on Wednesday. "The story is still strong."
-Joseph Adinolfi
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(END) Dow Jones Newswires
July 15, 2026 17:19 ET (21:19 GMT)
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