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The Technology Select Sector SPDR Fund, better known by its ticker XLK, just pulled off something it has never done before. Over a nine-week stretch, the fund outperformed the S&P 500 by 28 percentage points, marking the largest gap between the tech-heavy ETF and the broader index in the fund’s history.
While the S&P 500 posted modest gains in the single digits to low teens on a year-to-date basis, XLK surged to returns in the range of 28.5% to 32.9% by mid-June 2026.
AI is doing the heavy lifting
XLK’s top holdings read like a who’s-who of the AI arms race. Nvidia, Apple, and Microsoft collectively make up a massive chunk of the fund’s weight, and all three have been direct beneficiaries of what can only be described as an AI spending bonanza across corporate America and beyond.
Nvidia’s chips are the infrastructure layer for nearly every major AI model being trained or deployed globally. Apple and Microsoft are integrating AI capabilities across their product ecosystems, with Microsoft’s Azure cloud platform serving as a primary distribution channel for enterprise AI tools, while Apple’s on-device AI features have reinvigorated its hardware upgrade cycle.
Context for the streak
This nine-week run for XLK coincided with a broader winning streak for the S&P 500 itself. The index posted nine consecutive weeks of gains through early June 2026, its longest such streak since 2023. But even within a rising market, the tech sector managed to pull away dramatically.
That streak came to a halt around June 5, 2026, when a market correction introduced volatility back into the picture.
When a handful of mega-cap tech names are responsible for the lion’s share of market returns, sector ETFs like XLK become turbocharged versions of the broader index. The S&P 500 gets dragged higher by those same names, but it also carries the dead weight of sectors that aren’t riding the AI wave, like utilities, consumer staples, and real estate.
What this means for investors navigating the AI trade
On the risk side, a 28-point outperformance gap in nine weeks is, by definition, unsustainable over longer periods. The correction that followed the June 5 peak is a reminder that even the strongest trends experience pullbacks, and concentrated positions in a single sector amplify both gains and losses.
Nvidia’s dominance in training chips faces emerging competition from AMD, custom silicon from cloud providers like Google and Amazon, and a growing ecosystem of inference-focused hardware.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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