Study: Intangible Assets Now Dominate S&P 500 Valuations, Rewriting Capital Markets

Ocean Tomo’s latest Intangible Asset Market Value study, issued through J.S. Held, compiles five decades of U.S. market data and two decades of foreign-index observations to quantify how corporate value has migrated away from physical capital toward intangibles. The analysis indicates that what once represented a modest slice of market capitalization in the 1970s has become the dominant component in the S&P 500 by the end of 2025, with intangible-driven value now accounting for well over nine-tenths of index market capitalization. The study highlights a particularly intense reallocation during 1985–2005, when intangible weight rose from roughly one-third to nearly four-fifths of market value, a substantive structural shift in two decades. Between 2020 and 2025 the intangible share remained near ninety percent even as monetary policy tightened aggressively, a resilience that appears to contradict textbook expectations about rate sensitivity for long-duration cash flows. The report extends its framework beyond the United States to select European and Asian indexes, providing a comparative lens on how intellectual capital contributes to value globally. Methodologically, the study measures intangible market value by deducting reported net tangible assets from market capitalization, producing a time series that tracks compositional change rather than absolute enterprise scale. That approach surfaces predictable patterns—greater concentration of market value in technology- and IP-intensive firms—but also raises questions about measurement, disclosure, and the bankability of nonphysical assets. For corporate finance officers, the findings imply a growing mismatch between balance-sheet presentation and market valuation drivers, with direct consequences for how firms access capital and structure transactions. Lenders and risk managers will need to revisit collateral models and stress-test assumptions that treat intangible-heavy cash flows as highly rate-sensitive. For investors, portfolio construction and sector tilts must consider that traditional metrics tied to plant and inventory no longer capture the primary sources of return for large-cap U.S. equities. Policymakers and standard-setters should note the widening gap between economic reality and accounting frameworks, which can distort capital allocation and regulatory assessments. The study’s authors signal follow-up research to explain the observed stability of intangible valuations under restrictive monetary conditions, pointing toward an evolving literature on duration, pricing power, and intangible capitalization. Overall, the publication frames the last half-century as a regime shift in value creation with practical consequences for valuation practice, corporate governance, and financial stability assessment.