Mega-cap exceptionalism’s admittedly a tired topic by now, but then again, it’s the defining characteristic of the US equity market. So, it’s unavoidable.

In the course of outlining five new scenarios for US equities — including a new, more bullish base case — Goldman’s David Kosin offered a snapshot of the “mega-cap versus median” divide, if you will.

As the figure on the left, below, shows, the profit growth premium for the market leadership was a ridiculous 53ppt in 2023, and while it’ll likely narrow going forward, it’ll remain vast this year.

The figure on the right’s even more dramatic: Consensus for the Magnificent 7 minus Apple and Tesla has been revised up 38% over the past 12 months, versus downward revisions for the rest of the market.

“MSFT, NVDA, GOOGL, AMZN, and META have accounted for 60% of the aggregate index’s year to date return,” Kostin remarked, adding that those five companies posted Q1 YoY EPS growth of 84%. The typical S&P stock, by contrast, grew the bottom line by just 5% last quarter.

In addition, those five names now account for a quarter of the cap-weighted benchmark, which trades at a 30% P/E premium to the equal weighted S&P, the most since the dot-com bubble, when the disparity exceeded 100%.