ETFs
Nvidia, Microsoft and Apple are about to launch a big tech ETF
Nvidia, Microsoft and Apple all battled it out this week for the title of world’s most valuable company as investors bet big on the stock. the future of AI.
The moves coincide as one of the largest exchange-traded funds in the technology sector, State Street’s Technology Select Sector SPDR, with assets near $80 billion, prepares for a monster rebalancing.
“This is an anomalous event where you simultaneously hold three stocks, with a market capitalization greater than $3 trillion, in a single sector. This is unprecedented. This has never happened before,” Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors, told FOX Business.
Nvidia dethroned Microsoft on Tuesday for the first time as the world’s most valuable company, although continued volatility this week still puts them neck and neck – and Apple.
The chipmaker represents just under 6% of the XLK ETF, while Apple and Microsoft each represent more than 21%, according to the firm. After rebalancing, Nvidia will overtake Apple.
“Currently, as the fund has not been rebalanced, Apple is the second largest holding. So that means you have to rebalance and sell Apple stock to buy Nvidia stock,” Bartolini said.
The rebalancing will take place on Friday after the markets close, with the fund’s developments visible on Monday.
Nvidia has seen its shares skyrocket nearly 160% this year as it continues to lead the AI chip race. Last quarter, the company reported record revenue of $26 billion, an increase of 262% from last year. The company also has completed its 10-for-1 stock splitwhich began trading on June 10, and also increased its quarterly dividend payout by 150%, to 10 cents per share.
Constellation Research founder R “Ray” Wang is betting stocks will hit $200 this year.
“They dominate in terms of market share, competitors are just catching up, and of course their product roadmap is only a tenth of what they are capable of delivering, and they have made the GPU the standard in AI and the growth numbers don’t lie,” Wang said during an appearance on “Varney & Co.” “If you look at the sales, they’re there, even though the P/E numbers are crazy, they’re catching up with the sales numbers and, of course, they have a visionary founder.”
CEO Jensen Huang, whose signature look is a black leather jacket, has a growing cult following around the world as the company is firing on all cylinders. On a recent trip to his native Taiwan, he enjoyed the rock star treatment.
Jensen Huang, co-founder and CEO of Nvidia Corp., gives a lecture in Taipei, Taiwan.
He even threw out ceremonial first pitches, including one before a game between the CTBC Brothers and the Wei Chuan Dragons at the Taipei Dome.
The story continues
Original article source: Nvidia, Microsoft and Apple are about to launch a big tech ETF