Apple and Microsoft Entered the Value Index; Micron and SanDisk Left

The classic move for an investor who wants retirement savings kept away from technology stocks is a familiar one: buy a value fund.

This year the contents of that fund changed. The investor did nothing.

At the end of June, 45.8% of Apple's market capitalization and exactly half of Microsoft's were assigned to the Russell 1000 Value Index. A year earlier both were classified as 100% growth.

In the same reconstitution, Micron and SanDisk left the value index completely. A year earlier both were 100% value.

The Index Does Not Look for Cheap, It Looks for Rank

Once a year, FTSE Russell divides the companies in the Russell 1000 into growth and value. The split is not made by asking whether a stock is expensive or cheap.

The firm produces a style probability score for each company. The score has three inputs: book-to-price ratio, medium-term earnings growth forecasts, and historical sales-per-share growth.

A company scoring at one extreme is assigned entirely to that index. A company scoring in the middle has its market capitalization split, and enters both indexes at once.

Microsoft's score this year landed exactly in the middle: 50% growth, 50% value.

The Expected Story Ran Backwards

The common reading of the shift went like this: memory stocks flying on the AI wave flooded into the value index.

The opposite happened.

Memory stocks left the value index. Apple, Microsoft and Amazon walked in.

The reason sits in the second leg of the score. Earnings growth forecasts for Micron and SanDisk rose so far that their scores slid to the growth end even with book-to-price ratios still low. SanDisk's latest fiscal-year revenue came in at $20.248 billion, up 175.3%, with datacenter growth of 437%.

Amazon moved the other way. A year ago 27% of its market cap sat on the value side; this year 92% does. The largest single holding in the index is now Amazon, at roughly 6.6%.

Alphabet and AMD, meanwhile, exited the value side entirely for growth.

Not One Cheap Stock Was Bought

A fund tracking the value index rebuilt its portfolio after this reconstitution. What it bought was not cheap stock.

By MFS's calculation, the Russell 1000 Value Index's exposure to mega-cap technology companies rose from roughly 7% to about 18%. In FTSE Russell's own sector breakdown, technology became the index's largest sector, with its weight rising from 17.0% to 17.8%.

The two figures do not match because the two firms are counting different things: one only mega-cap technology companies, the other the whole technology sector.

Micron's past year shows why memory stocks crossed to the growth side.

The chart offers framing only; what determines the classification is not price but the inputs to the score.

What Lands in the Saver's Lap

Morningstar strategist Tom Lauricella noted in this week's commentary that technology's share of value ETFs has risen. It was 11% at the end of 2024 and sits between 20% and 25% today. Two examples he cited: technology is roughly 21% of the iShares S&P 500 Value ETF and roughly 24% of the iShares Morningstar Value ETF.

"Apple and Microsoft look like value stocks just because of where they are in the rankings."

The same problem runs through emerging markets funds. By Lauricella's account, semiconductors make up about 16% of the US stock market, while 22% of major emerging market indexes is concentrated in three or four companies, anchored by TSMC. That share doubled in 18 months.

Two separate funds bought to spread risk end up tied to the same cycle.

The Rule Did Not Change, the Inputs Did

A distinction is needed here.

FTSE Russell did not change its method. The formula behind the score is the same one used last year.

What changed were the numbers going into it. The Russell 1000's total market capitalization rose 29% in a year, from $55.7 trillion to $72.1 trillion. The combined value of the seven largest technology companies rose 49% over the same period, from $15.0 trillion to $22.4 trillion.

The same rule, run on different numbers, produced a different list.

What Is Left

The reconstitution has one more consequence: the same stock can sit in both indexes. MFS reported that as of the first quarter of 2026, more than 240 holdings were common to the two large-cap style benchmarks, and that number is expected to grow.

The assumption that holding a growth fund and a value fund side by side spreads risk weakens on that shared list. More: What Is an Index?

This article draws on FTSE Russell's own publications covering the June 2026 reconstitution, reconstitution analyses from MFS and Morgan Stanley, Morningstar's September 11 commentary on technology weightings in value ETFs, and SanDisk's reported fiscal-year figures. The weighting percentages are each firm's own calculation; because their definitions differ, they do not reconcile exactly. SanDisk's one-year return ranges from 2,107% to 3,093% depending on the data provider, which is why this article rests on the company's index classification rather than its return.

Correction (September 13, 2026): prose tightened for rhythm; figures and sources unchanged.