There aren’t many companies bigger than Apple.
The baby that Steve Jobs fostered and raised – has become even bigger after his death – which is something nobody would have dreamed…
Becoming one of the first trillion-dollar entities to ever exist.
That’s an astounding amount of money.
There’s a reason why many investors hold Apple in their portfolios – and it’s because it’s a solid company…
But is that about to change?
Probably not…
But it’s not going to be on the top of the technology mountain for rest of time.
There are other companies coming up behind it that could not only close the gap… and overtake it.
It’s a VERY short list…
But there’s one name amongst them that stands out – a company that could become the biggest tech company ever and has already overcome the mighty Apple – and Wall Street may be making moves to reflect that.
Keep reading to see who it is…
Wall Street is making moves, baby…
As one of the most significant tech ETFs – Technology Select Sector SPDR Fund (XLK) is looking to stock up on the biggest chip maker in the world – Nvidia (NVDA).
Here’s the scoop…
XLK is supposed to passively track an index of tech companies in the S&P 500 – but there’s a bit of room for creative liberties.
While Nvidia makes up a whopping 22% of the S&P tech index – it only constitutes a measly 6% of the ETF.
Why?
Well, it’s all thanks to some ancient diversification rules. These rules state that the combined weight of the biggest companies (those over 5%) can’t exceed 50% of the fund.
Now, Microsoft (MSFT), Nvidia (NVDA) and Apple (AAPL) each make up more than 20% of the S&P tech index.
XLK’s genius solution? Mirror the weight of the two biggest stocks and make sure the third doesn’t break the rules.
So, with Nvidia leapfrogging Apple to become the second-largest tech giant – XLK is set to triple the chipmaker’s weight during its quarterly rebalance.
It’s like a tech stock version of musical chairs – but with a lot more money involved.
XLK plans to boost Nvidia’s weight from 6% to 21% and slash Apple’s from 22% to 5%.
This shift means State Street (the ETF’s manager) will need to buy $11 billion worth of Nvidia shares and sell $12 billion worth of Apple.
Yes, you read that right. The Apple sale alone equals the company’s average daily trading volume over the past three months. It’s like a tech industry spring clean – but with billions of dollars on the line.
Passive index funds are supposed to track a benchmark – but this reshuffle shows just how far they can deviate.
And let’s not forget XLK’s skimpy Nvidia allocation has meant its investors missed out on the full glory of Nvidia’s meteoric rise.
As a result, XLK has lagged the S&P tech index by five percentage points this quarter – marking the biggest gap since 2001.
So, to put a bow on it all, what we’ve got is:
A passive index fund getting creative with a tech giant reshuffle – and investors potentially missing out on big gains.
Say what you want about the world of tech ETFs – you can’t say it’s boring.
However, ETF’s aren’t a GREAT way to make big gains, fast…
If you want to find the biggest winners – you have to really look at the things that most investors ignore.
When GorillaTrades was first being conceived – I knew I needed to present something different – and so, I decided that the only companies we would recommend, would have the right numbers and data to back up their potential.
I don’t trade on rumor or inuendo…
And neither should you.
Everything you need to succeed in the world of trading – is found in the data. This is why Warren Buffett has been so successful – he looks at the number behind the numbers before making any sort of move.
I’d love to show you how it works – but it’s one of those things you need to experience to understand.
Which is why I’m inviting you to become a member today.
You’d be just in time for our next round of recommendations – so, don’t wait too long. Act now!
And regardless of whether or not you join GorillaTrades – you should keep your eye on what’s going on with Wall Street…
Things are getting interesting.
“Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road.” – Stewart Brand