What Is the Russell 1000 Value Index and Why Are Alphabet and AMD Leaving It?

TLDR

• Alphabet and AMD are being removed from the Russell 1000 Value Index and reclassified as pure growth stocks.
• Apple and Microsoft are moving in the opposite direction, joining the value index and shifting from pure growth to a blend of growth and value.
• The reconstitution is preliminary, finalised June 18, and takes effect June 29.
• Around $12.2 trillion in assets are benchmarked to Russell U.S. Indexes, making this rebalancing a major market event.
• The total market cap of the Russell 3000 jumped 29% to $75.6 trillion, with Nvidia now ranked No. 1 by market cap among U.S. companies.

FTSE Russell released its preliminary list of index changes on May 22, kicking off its semi-annual rebalancing process for U.S. equity indexes scheduled for June 2026.

The biggest headlines from the preliminary list involve some of the largest companies in the U.S. stock market. Alphabet and Advanced Micro Devices are being removed from the Russell 1000 Value Index. That means both companies will be reclassified as pure growth stocks.

Alphabet Inc., GOOGL

Apple and Microsoft are moving the other direction. Both will join the value index, shifting from a pure growth classification to a blend of growth and value.

Micron Technology and Sandisk are also moving, being removed from the value index and added to the Russell 1000 Growth Index. Continued strength in semiconductor stocks has driven that change.

Analysts had widely expected Amazon to be reclassified as purely value, given slowing revenue growth in recent years. Jefferies’ equity research team estimated in March that Amazon would be classified as “100% Value.” FTSE Russell did not mention Amazon in its growth and value index comments.

The preliminary list will be finalised on June 18. The reconstitution officially takes effect after the U.S. market close on June 29.

Why This Matters for Investors

The reclassification may sound like accounting, but it has real money behind it. Approximately $12.2 trillion in investment assets are either benchmarked to or invested in products that track the Russell U.S. Indexes. Any shift in classification triggers rebalancing activity across hundreds of ETFs and mutual funds.

Trading volume on Russell rebalancing days is historically high. In June 2025, the closing auction alone saw $217.2 billion in trading volume.

The Bigger Picture: U.S. Market Concentration

The 2026 rebalancing also highlights how much the overall market has grown. The total market cap of the Russell 3000 rose from $58.4 trillion to $75.6 trillion as of the April 30 ranking date, a 29% increase year over year.

Nvidia has jumped to the top spot among U.S. companies by market cap, after its value surged 82.5% over the past year. Alphabet posted the strongest annual gain among the top ten, moving from fifth to second place. Apple and Microsoft slipped to third and fourth.

Nine of the top ten companies by market cap held their positions. Walmart replaced Eli Lilly as the only new entrant on that list.

All ten companies in the top ten now exceed $1 trillion in market cap. Five exceed $2 trillion, and four are above $3 trillion. That compares to only seven companies above the $1 trillion mark in 2025.

The combined market cap of the seven largest U.S. tech companies — Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla — rose from $15 trillion in 2025 to $22.4 trillion, a 49% increase.

The threshold separating Russell 1000 large-cap stocks from Russell 2000 small-cap stocks also rose 24%, reaching $5.7 billion. Within the small-cap segment, the smallest constituent of the Russell 2000 had a market cap of $146.4 million, up nearly 23% from 2025.

Upward reclassifications from small-cap to large-cap were led by technology and industrial sector companies.

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