The Technology Select Sector SPDR Fund (XLK) Top 25 Holdings

The Technology Select Sector SPDR Fund (XLK) is one of the most popular vehicles for investors looking to tap into U.S. large-cap technology. By tracking the technology sector of the S&P 500, it captures the innovation and scale of companies at the forefront of AI, cloud infrastructure, and digital ecosystems. With over $50 billion in assets, XLK remains one of the largest and most liquid sector ETFs.

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Year-to-date in 2025, XLK has gained 22.7%, with a 31.6% CAGR over the period. The ETF has benefitted from an AI-driven rally led by NVIDIA, continued resilience from Microsoft’s cloud business, and Apple’s stability as a global consumer tech leader. This performance highlights technology’s ongoing role as the driving force behind the broader market’s growth.

It is essential to know that XLK is highly concentrated, as the top three holdings, NVIDIA, Microsoft, and Apple, make up nearly 40% of the ETF. This concentration brings both strength and risk: investors gain maximum exposure to sector leaders, but performance is heavily tied to these few names.

1. NVIDIA (NVDA)

NVIDIA has been the undisputed leader in AI-driven growth, with its dominance in GPU technology powering data centers, machine learning, and advanced computing. The company’s chips are now central to the AI infrastructure build-out, creating a demand cycle that shows no sign of slowing. With NVDA representing nearly 15% of XLK, its performance is pivotal for the ETF’s trajectory.

Beyond hardware, NVIDIA’s ecosystem of software tools, including CUDA and AI frameworks, deepens customer lock-in and raises switching costs. This strategy creates durable competitive advantages, ensuring NVIDIA maintains its premium pricing power and market leadership in AI. Revenue from data centers has already overtaken gaming, highlighting the structural shift in its business.

For XLK investors, NVIDIA represents not only explosive near-term growth but also a long-term anchor for innovation in AI, robotics, and autonomous systems. Its weight reflects the fund’s tilt toward companies leading the next wave of digital transformation.

2. Microsoft (MSFT)

Microsoft remains one of the most influential names in global technology, with diversified revenue streams that span Office 365, Azure cloud, and enterprise software. Azure remains the company’s fastest-growing division, directly competing with AWS while benefiting from AI integration through its partnership with OpenAI. MSFT’s cloud strength ensures recurring revenue and high margins, making it one of XLK’s most reliable performers.

The company’s shift toward embedding AI tools across its product ecosystem, from Copilot in Office to developer integration in Azure, has deepened customer reliance and widened its moat. With a market capitalization of over $3 trillion, Microsoft has both the scale and balance sheet to continue investing aggressively in next-generation technologies.

In XLK, Microsoft plays the role of a stabilizer, characterized by steady cash flows, resilient growth, and consistent shareholder returns through dividend payments and share repurchases. Its presence balances the fund’s exposure to more volatile high-growth names like NVIDIA.

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3. Apple (AAPL)

Apple continues to thrive on its hardware-software ecosystem, which drives loyalty and recurring cash flow through iPhones, Macs, wearables, and services. Its services segment, including Apple Music, iCloud, and App Store revenue, has grown into a $100 billion business, helping offset cyclical iPhone sales. With nearly the same weight as Microsoft, Apple’s presence is central to XLK’s long-term stability.

Recent innovations in spatial computing, AI-enabled devices, and potential health-related wearables keep Apple relevant in emerging growth areas. Despite tighter margins in hardware, Apple maintains pricing power and unmatched brand equity, giving it a defensive edge even in downturns.

For XLK holders, Apple represents resilience and reliability. Its consistent cash generation, massive buyback program, and dividend growth solidify its role as a core tech anchor.

What XLK Really Owns

XLK’s top three holdings, NVIDIA, Microsoft, and Apple, make up just under 40% of the fund, underscoring the concentrated nature of technology leadership in U.S. markets. These companies represent a blend of explosive growth (NVDA), enterprise stability (MSFT), and consumer brand power (AAPL).

While concentration risk exists, the flip side is that XLK investors are directly exposed to the most innovative and profitable firms driving the global digital economy. The fund’s strong year-to-date performance highlights the sector’s ongoing leadership.

Key Insights

• XLK has gained 22.7% YTD, fueled by AI and cloud adoption.
• The top three holdings (NVDA, MSFT, AAPL) make up nearly 40% of the fund.
• NVIDIA provides explosive AI growth; Microsoft offers cloud stability; Apple delivers consumer resilience.
• Concentrated exposure carries risk but ensures alignment with the sector’s biggest winners.
• XLK remains a core growth ETF for investors seeking direct access to the tech megatrend.

Why You Should Invest In XLK

Technology remains at the forefront of market returns, and XLK serves as a pure play on this trend. With a 22.7% YTD gain and a 31.6% CAGR, the ETF continues to reward investors who believe in the transformative power of AI, cloud, and digital ecosystems.

The concentration in mega-cap tech stocks means XLK is less diversified than broader indexes, but that specialization is precisely what makes it appealing for investors seeking targeted exposure. As long as AI spending, cloud adoption, and consumer tech ecosystems expand, XLK remains well-positioned to capture growth.

Looking forward, XLK is not just a bet on technology, it’s a direct investment in the innovation engines reshaping the global economy. Investors should view it as both a growth vehicle and a barometer of U.S. market leadership in the tech sector.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!