Nvidia-led tech titans trump energy: AI reigns, leaving big oil in search of love

In 1995, tech stocks surpassed energy in the S&P 500, foreshadowing a paradigm shift. Today, the S&P 500's transformation into S&P 5,000 is led by AI, exemplified by Nvidia's market value surpassing the entire energy sector. Despite Big Oil's half-trillion-dollar payouts, investor love remains elusive. Mergers and acquisitions hint at industry rationalisation, not a bullish resurgence. As tech giants dominate, a potential exogenous shock, like a tech crash, may liberate energy stocks. The irony lies in AI's energy consumption, presenting an uncertain balance in this evolving market dynamic.

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By Liam Denning

May 17, 1995, a Wednesday, was a historic day for energy stocks. Not that they acted that way: Like the oil price — about $20 a barrel — they were flat. The action was elsewhere: Technology stocks overtook the energy sector's weighting in the S&P 500 for the first time that day. Bloomberg News noted the Nasdaq's rise versus the Dow's drop, sparked by a big earnings beat from chip-equipment maker Applied Materials Inc. Netscape Communications Corp.'s stock-market debut, the internet's coming-out party, was only a month away.

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