Catherine Yoshimoto
- Amazon, Alphabet, and Meta are now classified as part growth, part value - a significant evolution from their pure growth past.
- Russell’s objective style methodology calculates composite value scores annually, reflecting real market changes.
- Style classifications are dynamic - Apple’s history proves companies can move fluidly between growth and value over time.
As one of the busiest days in the US stock market calendar, the annual Russell Reconstitution (“recon”) consistently captures investor attention as portfolios rebalance to reflect the evolving market landscape.
From a style perspective, the 2025 recon marks a key moment in how we categorize some of the world's largest companies: that’s because mega-cap stocks Amazon.com, Alphabet, and Meta are shifting from pure growth to part-growth/part-value classifications.
On May 23, we released preliminary index additions and deletions as well as a summary of this year’s changes, giving market participants a preview of Russell US Style Index changes.
Below, we explore how Russell's objective style methodology works, examine the fundamental changes driving these recent shifts, and consider a historical precedent that suggests this transformation reflects natural business maturation rather than a fundamental disruption.
Assigning style weights with an objective methodology
Each year, our Russell recon process involves reevaluating companies in our Russell US Indexes to determine where they lie along the investment styles spectrum. We calculate Russell 1000® and Russell 2000® Growth and Value Index constituent weights and apply banding to limit turnover during the reconstitution.
Constructing the Russell 1000 Growth and Value Indexes
As shown, we use three main variables in our methodology- one value and two growth metrics- to calculate a composite value score (CVS) for each Russell 1000 Index constituent.
We then rank the stocks and apply a probability algorithm to determine style index membership weights, where half of the overall market value of the Russell 1000 Index is allocated to growth, and the other half to value. If constituent data is missing or the book-to-price value is negative, we substitute the company’s score with the average for its Industry Classification Benchmark (ICB) group.
| Russell Style methodology variable | |
|---|---|
| Growth | Value |
| IBES 2-year forecast medium-term growth | Book-to-Price (BP) |
| Historical 5-year sales per share growth |
It’s also important to note that some stock characteristics don’t allow for an absolute style distinction. In these cases—which typically represent about 30% of the index’s market value—we allocate portions of the company’s market cap to both growth and value styles. This policy reduces index turnover as it results in fewer outright annual switches of stocks between the growth and value indexes, which in turn helps investors using the indexes as benchmarks or in index-tracking mandates.
Since the Russell 1000 Index is the sum of the (uncapped)[1] Russell 1000 Value Benchmark and Russell 1000 Growth Benchmark indexes - and the same is true for the Russell 2000 and its Style Benchmark indexes - constituents’ market cap is never double counted.
Amazon.com, Alphabet, and Meta shift to partial value
In 2025, the largest additions to the Russell 1000 Value Index by size and weight are:
- Amazon.com – which has shifted from a 100% growth classification to 73% growth and 27% value;
- Alphabet – which has shifted from 100% growth to 65% growth and 35% value;
- Meta – which has shifted from 100% growth to 82% growth and 18% value.
It’s worth noting that all three companies have shifted partially to value in the past, most recently in 2014 (Amazon.com) and 2022 (Alphabet and Meta). The addition of Alphabet and Meta to the Russell 1000 Value Index increases its Technology industry weight by a significant 4.65 percentage points (to 11.3%).
Methodology in action: Detailing the style shifts
If we look at how we calculated weights for Amazon.com, Alphabet, and Meta during the recon, we can follow these stocks’ shift from a pure growth to a partial value classification.
The value variable we consider in the Russell style methodology is the book-to-price ratio. As shown in the table, the ratio for Amazon.com and Alphabet increased from a year earlier (since the 2024 recon), while the Russell 1000 median book-to-price ratio decreased.
On the growth side of the equation, we see that all three companies’ IBES 2-year forecast medium-term growth declined by more than the 1-year change for the Russell 1000 median.
One-year change as of April 30, 2025 (rank date)
| IBES 2-year forecast medium-term growth | Historical 5-year sales per share growth | Book-to-price | |
|---|---|---|---|
| Amazon.com | -0.49 | -0.04 | +0.037 |
| Alphabet | -0.10 | -0.01 | +0.033 |
| Meta | -0.36 | -0.01 | -0.003 |
| Russell 1000 Median | -0.03 | -0.08 | -0.002 |
Source: FTSE Russell, data as of April 30, 2025. Past performance is no guarantee of future returns. Please see the end for important legal disclosures.
In summary, as improving book-to-price ratios boosted their value characteristics and/or slower expected growth rates reduced their growth characteristics, the composite style scores for Amazon.com, Alphabet, and Meta shifted away from pure growth.
This isn't a judgment on these companies' innovation or prospects—rather, it’s an objective reflection that they've evolved from high-growth disruptors to substantial enterprises with more mature business models.
Lessons from Apple: Style classifications are never etched in stone
When we next reconstitute our Russell style indexes in June 2026, we will see whether Amazon.com, Alphabet, and Meta will wade farther into value territory or reverse course.
However, if Apple’s style classification history is any indication, we can trust it’ll continue to be an evolving picture. In the chart, we can see that after the 1999/2000 tech bubble deflated, Apple spent three years as a 100% value company. It then shifted back to a pure growth stock—and has since partially shifted to value twice (in 2013 and 2016), for a year only in each case.
Apple - Russell Style classification history
Apple's classification journey demonstrates that style categories are fluid, not fixed. As business fundamentals and market conditions evolve, so do company classifications—and our Russell US Style Index methodology is designed to capture this ongoing transformation and ensure that our indexes accurately reflect current realities.
[1] Effective March 2025, Russell US Style Indexes apply a capping methodology in consideration of RIC 5/50 diversification limits. The Russell US Style Indexes that do not apply capping include “Benchmark” in the index name, e.g. Russell 1000 Growth Benchmark Index. The preliminary membership changes announced on May 23, 2025 are for the Benchmark indexes, and capped weights will be calculated after the close of June 18, 2025, effective for the open of June 30, 2025. For more information, refer to the technical notice: research.ftserussell.com/products/index-notices/home/getmethodology/?id=2614011. For more information on the capping methodology, refer to: Capping Methodology
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