Over the last ten years, it’s pretty clear that investors without a stake in the IT sector probably lagged behind the S&P 500. This sector includes tech giants like Nvidia, Apple, Microsoft, Broadcom, and Palantir. The Vanguard Information Technology ETF covers more than 300 stocks across 12 different segments in the IT space.
The S&P 500 represents 500 companies from various sectors, yet the IT sector is now at an unprecedented weight of 35.1%. This is largely due to the presence of the three largest firms—Nvidia, Microsoft, and Apple—with a staggering combined market value of $12 trillion. Their impressive performance has played a key role in pushing the IT sector up nearly 700% in the past decade, far exceeding the overall S&P 500 growth.
To put it simply, those who opted for the entire S&P 500 without taking IT into account saw returns of just 81% over the last ten years. So, owning shares in companies like Nvidia, Microsoft, and Apple really feels essential to keep pace with the broader market.
Fortunately, investing in the entire IT sector has become simpler than ever. The Vanguard Information Technology ETF manages a portfolio of 314 tech stocks, many of which aren’t even in the S&P 500. A significant portion—43.6%—of its assets are in Nvidia, Microsoft, and Apple.
The ETF covers 12 subsegments, with semiconductors being the biggest focus, accounting for 31.3%. This isn’t surprising, especially considering Nvidia’s market value skyrocketed from $360 billion to $4.4 trillion in 2023. Other key players in the semiconductor field, like Broadcom, AMD, and Micron, are also critical suppliers, particularly fueling the current boom in artificial intelligence.
AI is certainly a hot topic in tech circles today. Each of the top 10 stocks within Vanguard’s ETF plays a role in this growth—be it through data center infrastructure, software, or cloud services.
Here’s a quick look at the Vanguard ETF weighted by stock:
1. Nvidia – 17.16%
2. Apple – 13.35%
3. Microsoft – 13.09%
4. Broadcom – 4.47%
5. Oracle – 2.34%
6. Palantir Technologies – 2.02%
7. Cisco Systems – 1.39%
8. AMD – 1.33%
9. International Business Machines – 1.33%
10. Salesforce – 1.14%
As of September 30, 2025, these figures could change. Recently, Apple teamed up with OpenAI to launch Apple Intelligence, a suite of AI-driven applications for their devices that can summarize messages and prioritize notifications. With over 2.35 billion active devices globally, Apple is positioned as a strong player in consumer-focused AI.
Microsoft and Oracle are also major buyers of data center components, developing their own AI software while renting computing power to various companies. Interestingly, demand is outstripping their capacity—many firms are racing to adopt AI solutions. Palantir has seen an exceptional rise, up 300% in just the past year, thanks to platforms that utilize AI to help organizations derive insights from their data.
The Vanguard ETF also includes renowned names within the AI sector, such as Adobe, Snowflake, Datadog, Palo Alto Networks, and CrowdStrike. Since its launch in 2004, this ETF has achieved an average annual return of 14.2%, significantly outperforming the S&P 500’s 10.4% average.
Given its considerable exposure to high-volatility areas like AI, it’s wise for investors to exercise caution and not overly commit. This ETF could be a good fit for those feeling heavily invested in more stable sectors, like finance or real estate—areas known for dividends but slower growth.
As previously noted, missing out on the IT sector often means reduced returns. Investors who currently lack shares in companies like Nvidia, Apple, or Microsoft might want to consider the Vanguard Information Technology ETF, especially since AI is expected to be a substantial growth driver in the future.
If you’re thinking of buying into the Vanguard Information Technology ETF, it’s worth noting that analysts at Motley Fool have identified ten stocks they think hold even better potential for returns right now. It’s always good to explore new opportunities.
