On June 21, XLK may settle its holdings worth $24 billion, involving the market value battle between Apple $AAPL and Nvidia $NVDA.
XLK: Technology Select Sector Index ETF
According to James and Eric's tweets, next Friday, June 21, XLK may swap its holdings of Apple and Nvidia stocks, involving a total amount of $24 billion. This swap may boost the market value battle between Nvidia and Apple in the short term.
For this swap, XLK will sell $12.6 billion at the current $AAPL price and buy $10.9 billion worth of $NVDA at the same time.
According to a series of tweets, XLK will increase its own positions after evaluating the weights of the top three stocks at regular intervals.
At the close of the U.S. stock market on Friday, Nvidia's free float market value slightly beat Apple and was given a weight boost, while Apple was treated as the third and its weight was weakened.
Among the top three XLK stocks, the second one has a weight of more than 20%, while the third one has only 5%. Therefore, the third one that failed will be heavily sold off, and the funds that persist will be used to increase the holdings of the second-ranked stocks.
Many people will wonder why Apple's market value is lagging behind Nvidia when the U.S. stock market closed on Friday! ?
This involves a free float market value data.
Free float: It is the adjusted market value. This data excludes long-term holders with a high holding ratio threshold (such as governments, institutions, founders and strategic investors). The free float market value is the data after removing these long-term holders.
The ranking of XLK is based on the free float value. Nvidia narrowly beat Apple in free float, so Apple will face XLK's reduction of holdings next Friday.
However, this action needs to be confirmed by S&P (Standards & Poor's) /SPDR (XLK issuing company) later.
