In 2025, the S&P 500 has recorded a gain of about 5%, but three major companies — Apple, Alphabet, and Tesla — are significantly dragging down this growth with their poor performance.
Apple Struggles in 2025
Apple Inc., the third-largest company on the S&P 500, has dropped 17% this year. This decline is tied to ongoing issues with US trade tariffs and the company’s failure to roll out functional AI services. Despite a year-long pitch for 'AI for the rest of us,' this strategy has not translated into investor trust. Paul Marino, the chief revenue officer at Themes ETFs, noted, 'It makes sense that people aren’t pouring additional dollars into Apple right now until they have some kind of blueprint for what they’re going to be doing with AI.'
Alphabet and AI Concerns
Alphabet Inc., valued at around $2.1 trillion, is down 7% in 2025. Investor concerns about the company’s search engine revenue have grown. There is anxiety that AI chatbots could diminish traffic and ad revenue from Google Search. This issue has overshadowed Alphabet’s performance throughout the year.
Tesla Faces Declining Demand for EVs
Tesla Inc. has experienced the worst decline of the three companies, with its stock down 26% due to a drop in demand for electric vehicles. Sales have slowed in multiple regions, and the lack of announcements regarding new technology has left Tesla unable to reverse this trend.
Thus, the weak performance of Apple, Alphabet, and Tesla significantly restricts the growth of the S&P 500 in 2025, despite the success of other companies within the technology sector.
