Nvidia is an American multinational corporation and technology company that designs and sells advanced GPUs, application programming interfaces(APIs), and chips for multiple uses for a wide range of customers including cryptocurrency miners, gamers, and other professionals for their varying needs.
On Tuesday, Nvidia became the world’s most valuable company due to an increase that was seen in the price of its shares.
In this article, we will look at the share of Nvidia in the current ETF portfolio reshuffling plans that many of the leading fund managers have proposed due to the recent developments in Nvidia.
What is the current market stance of Nvidia?
The chip maker is now worth almost $3.33 trillion in market value, surpassing that of Microsoft which stood at $3.317 trillion at the time of the price surge.
Nvidia is a giant in many of the hottest segments of the technology industry such as GPU designing, Application programming interface development(APIs), and chip making for a wide range of activities such as gaming, cryptocurrency mining, and other high processing power demanding activities.
Nvidia has been at the forefront of the AI-chip revolution with the company getting one of the notable mentions in almost all the articles and opinion pieces written about the technology.
It came as no surprise that the shares of the company experienced a boom in recent days but let us look more into what the change brings to the table in terms of the continuity of its price hike and market composition and market dominance.
Let us look at the notable aspects of the change and the response from the market on the same in the next section
What changes did Nvidia’s price change bring to the market of ETFs?
The notable response to the recent development came as news from one of the major players in the ETF fund sector, SPDR Fund announcing that it will be buying close to $10 billion worth of shares in Nvidia while attempting to reduce its exposure to other tech giants like Microsoft and Apple.
Technology giants like Microsoft and Apple were among the two of the most represented players in most of the ETF funds with both of them maintaining close to 21% shares in almost near equal quantities on a lot of the ETF funds.
The current dip in the price of Apple’s shares happening side by side with the increase in the price of Nvidia’s shares has led a lot of investors to consider the composition of shares that the three technology giants should share in their revamped ETF portfolio model.
Spear Alpha ETF, one of the largest holders of Nvidia shares (14%) is hopeful for the continued rise of the share price in the near future due to the recent developments that have happened in Nvidia with regard to its AI-chip sector.
Another business icon who commented on the future prospects of Nvidia was Tom Plumb, the president of Plumb Funds, who said that he believes the AI chip segment of Nvidia is underappreciated by many and reasons it for its large holding in the share for more than 7 years.
From these responses that we have heard from some of the biggest names in the fund market, it can be said that the majority of the fund managers have expressed their optimism regarding the recent surge while others have shown their reservations regarding taking any changes with such a short periodic development.
It cannot however be argued that more and more of the funds have been considering shifting their funds in favor of giving more exposure to Nvidia and have been seen acting on the same.
Let us now summarise all the points raised and look at what we can get out of the recent saga in the final thoughts below.
Final Thoughts
There is no doubt that many of the ETFs have and will continue to benefit from the recent rise of Nvidia in its share price and market dominance but the question that everyone must consider is how much exposure they would like to have to the company and its products.
Nvidia even with its largely positive market stance and favorable prospects for growth will still have to be looked at about its capacity for contribution to the investors who rely on the share to grow their gains.
It is therefore a matter of subjective concern about which ETFs they should choose so as to get the best and most suitable exposure to the company, its products, and its shares.
