Nvidia, Microsoft and Apple all jockeyed this week for the title of world’s most valuable company as investors bet big on the future of AI.
The moves coincide as one of the biggest tech exchange-traded funds, State Street’s Technology Select Sector SPDR with assets near $80 billion, prepares for a monster rebalance.
"It is an anomalous event where you have three securities, a market capitalization greater than $3 trillion, all at the same time, all within one sector. That is unprecedented. Never happened before," Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors, told FOX Business.
Nvidia on Tuesday unseated Microsoft as the world’s most valuable company for the first time, though ongoing volatility this week still has the two – and Apple – neck and neck.
The chipmaker represents just under 6% of the XLK ETF, while Apple and Microsoft are over 21% each, according to the firm. After the rebalance, Nvidia will leapfrog Apple.
"Right now, because the fund hasn't rebalanced, Apple is the second-largest security. So that means you have to rebalance and sell Apple shares to buy Nvidia shares," Bartolini said.
The rebalancing will take place on Friday after the close of trading, with the fund’s changes visible on Monday.
Nvidia has seen its shares skyrocket nearly 160% this year as it continues to lead the race for AI chips. Last quarter, it posted a record $26 billion in revenue, a 262% jump from the year-ago period. The company also completed its 10-for-1 stock split, which began trading on June 10, and it also boosted its quarterly dividend payout 150% to 10 cents per share.
Constellation Research founder R "Ray" Wang is betting shares will top $200 this year.
"They are the dominant one in market share, competitors are barely catching up and of course their product roadmap, we are only seeing one-tenth of what they’re able to deliver, and they’ve 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 sales, they are there, even if the P/E numbers are crazy, they are catching up with the sales numbers and, of course, they have a visionary founder."
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CEO Jensen Huang, whose signature look is a black leather jacket, has a cult following that is growing around the globe as the company fires on all cylinders. During a recent trip to Taiwan, his birth country, he got the rock star treatment.
He even threw out ceremonial first pitches, including one before a game between the CTBC Brothers and Wei Chuan Dragons at Taipei Dome.
