The S&P 500‘s been a phenomenal investment over the last five years, delivering a total return of 71.1% since June 2021. But scratch beneath the surface and a more complicated picture emerges. And it’s one that every investor should understand before automatically reaching for an index tracker in June.
Let’s dive in.
Not all of the S&P 500’s pulling its weight
Here’s the uncomfortable truth. Just five stocks (Nvidia, Alphabet, Broadcom, Microsoft, and Apple) accounted for nearly 45% of the index’s total returns over recent years, with the top-10 holdings now representing over 40% of the entire index.
To see how significant this is, consider the equal-weighted S&P 500 – a version where all 500 companies carry equal weight. Over the last five years, this version of the index has returned closer to 35% compared to the headline 71.1%. The difference is almost entirely explained by a handful of mega-cap AI and technology companies.
That level of concentration is fantastic when tech prices are rising. But when they fall, the impact on the index can be swift and severe. And that’s why 2026 is increasingly looking like a stock picker’s market.
Where are the overlooked opportunities?
Plenty of high-quality, non-tech businesses in the S&P 500 have been left behind as investors chase AI-related gains. And AbbVie‘s (NYSE:ABBV) one that institutional analysts believe deserves far more attention.
As a quick crash course, AbbVie’s a global biopharmaceutical company whose portfolio spans immunology, oncology, neuroscience, and aesthetics.
For years, it was defined by Humira, which at one point was the world’s best-selling drug. But when Humira lost its patent protection, many investors assumed the story was over. Well, it wasn’t.
The real growth drivers are now Skyrizi and Rinvoq – two next-generation immunology medicines that management previously guided to combined 2027 sales of over $27bn.
That figure’s since been revised upward by $4bn to hit $31bn by the end of 2026 – a year ahead of schedule – paired with a $100bn commitment to invest in further research & development over the next decade.
Goldman Sachs has responded by raising its price target to $244. And 26 analysts currently rate the stock as a Buy or Outperform, with the most optimistic share price target sitting at $328 – roughly 45.8% higher than where the stock’s trading today.
So where’s the risk?
What could go wrong?
The main concern is the US government’s drug price negotiation programme. AbbVie’s Vraylar has been targeted for price negotiations, with prices taking effect in 2027. Management’s said it doesn’t expect a significant impact on long-term guidance, but any expansion of the programme to Skyrizi or Rinvoq would be a serious headwind. And that may force analysts to revisit their optimistic forecasts.