Losing its long-standing spot as the most-valuable S&P 500 stock was Apple's first indignity. But now it's on the cusp of losing the No. 2 spot, too.
Thanks to a 12% drop in it stock this year and 87% surge by Nvidia, Apple is now worth just $2.6 trillion. That's already 14% behind the $3 trillion value of Microsoft, the most valuable company in the S&P 500, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
But more interesting now, Apple ranks just 15% ahead of Nvidia with a market value of $2.3 trillion. Just a decent rally would be enough to knock Apple out of the top two.
"While a stock like Nvidia has continued to fly, not every megacap has been rallying," says Bespoke Investment Group. "Apple has been in a rough stretch falling 9.2% since its earnings report one month ago and 14.3% since its 52-week high in late December."
Apple's Influence Wanes
Apple continues to apply a large influence on the S&P 500. So its falling value is a concern to most investors.
Apple's value remains 5.7% of the total market value of the entire S&P 500. It's also 5.8% of the popular S&P 500 ETFs and index funds. That's only behind Microsoft's 6.6% portion of the index' market value and 7.0% weight in the S&P 500 ETFs.
Concerns about Apple, abound though. The company's profit is only seen rising 6.9% this fiscal year. That's almost half the 11% expected growth this year in the S&P 500. Additionally, the company's business practices are stoking regulatory action in Europe. Apple's rent-seeking on commerce conducted on the App Store is attracting attention.
But perhaps most importantly, the company remains behind Microsoft and Nvidia in the AI race.
The Rise Of Nvidia
And as Apple struggles, Nvidia is turning it on. The company's profit is seen jumping nearly 90% this fiscal year.
Meanwhile, the company's chips are at the nucleus of many of the most promising AI applications around the world. If there's any risk, it's that shares have jumped too far, too fast. Analysts now think Nvidia shares are 5% higher than they should be worth in 12 months.
But Nvidia has a knack at blowing past expectations. Nvidia's profit for the January quarter topped views by 11.5%. And another upside surprise might be all it takes to push Apple aside in the S&P 500.
Nvidia Gaining Fast
It's on its way to be the No. 2 most-valuable S&P 500 stock
| Company | Ticker | Stock YTD % ch. | Market value ($ billions) |
|---|---|---|---|
| Microsoft | 8.7% | $3.0 | |
| Apple | -12.1% | $2.6 | |
| Nvidia | 86.7% | $2.3 | |
| Amazon.com | 16.4% | $1.8 | |
| Alphabet | -3.6% | $1.7 | |
| Meta Platforms | 44.6% | $1.3 | |
| Berkshire Hathaway | 11.4% | $0.9 | |
| Eli Lilly | 33.8% | $0.7 | |
| Broadcom | 25.7% | $0.7 | |
| Tesla | -27.9% | $0.6 |
