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Chart of the Week
May 8, 2026
2 MIN READ

U.S. middle market: A counterweight to AI concentration

New
As tech firms increasingly dominate public and private market returns, the U.S. middle market may provide an important source of diversification.
authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
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Sector composition of U.S. economy vs. public and private equity markets
Chart comparing the composition of the S&P 500 and the large-cap U.S. private equity to the U.S. middle market and the U.S. economy.
Source: U.S. BEA, Bloomberg Finance, L.P., Pitchbook, as of Q1 2025.
  • Capital is becoming increasingly concentrated in AI and technology companies, narrowing sources of return across public and private markets and increasing investors’ reliance on the theme’s continued momentum.
  • Since ChatGPT 3.5 launched in November 2022, 49 AI-related stocks have accounted for approximately 70% of S&P 500 gains.1
  • The large-cap segment of private equity faces similar concentration challenges. In 2025, technology transactions represented approximately 30% of large-cap private equity deal volume.2
  • The U.S. middle market provides a broader and more diversified investment pool, comprising more than 200,000 companies with $10 million to $1 billion in annual revenue and representing roughly one-third of private-sector gross domestic product (GDP).
  • With double-digit year-over-year revenue growth and a sector mix that more closely mirrors the U.S. economy, allocations to the middle market can reduce the structural tech overweight embedded in public equities and large-cap PE while providing diversified exposure to core drivers of U.S. economic growth.
contributing authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
view bio
footnotes + disclosures
  1. Bloomberg, Future Standard.
  2. Pitchbook, as of December 31, 2025. Represents deals above $1 billion.

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