AI boosts Apple stock to record high, Nvidia rivalry to involve billions in rebalancing selling pressure

Apple (AAPL) rose over 7% yesterday, reaching a historic high of $207.15 per share. Just a day before, the company announced the long-awaited artificial intelligence (AI) news at its annual developer conference on Monday.

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Apple Overtakes NVIDIA, Reclaims Second Place in Market Value

Analysts at Morgan Stanley stated that Apple's artificial intelligence capabilities have made the company the "most differentiated consumer digital agent." Furthermore, these features will prompt consumers to upgrade their iPhones, which should "accelerate device replacement cycles." Morgan Stanley has updated its target price for Apple to $216, with a bullish outlook reaching $270.

Apple's significant surge yesterday has brought its market value to $3.176 trillion, once again claiming the second spot in market value, just $40 billion behind the leader, Microsoft. NVIDIA follows closely behind with a $202 billion difference. The competition among the top three is fierce!

If Apple Loses Second Place, $11 Billion Rebalancing Sell Pressure Will Arise

Bloomberg ETF analyst James Seyffart stated that the $670 billion tech ETF $XLK will conduct a rebalancing later this month. According to its fund holding requirements, if Apple's market value continues to fall below NVIDIA's, XLK will be forced to sell around $11 billion worth of Apple AAPL and buy nearly $10 billion worth of NVIDIA NVDA.

Fortunately, Apple rebounded significantly yesterday. If it can maintain its second-place position before the market closes on Friday, it can avoid the awkward situation of forced selling due to rebalancing.

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