The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan, May 30, 2017.
Nvidia 's blistering rally will force a major technology exchange-traded fund to acquire more than $10 billion worth of shares of the chip giant while cutting dramatically back on Apple .
The index that the Technology Select Sector SPDR Fund (XLK) follows will soon rebalance, based on an adjusted market cap value from Friday's close. The new calculations show Microsoft as the top stock in the index, followed by Nvidia and then Apple, according to Matthew Bartolini, head of SPDR Americas Research.
All three stocks would have a weight above 20% in the index if there were no caps in place. But diversification rules for the index limit how big the cumulative weight of stocks with at least a 5% share of the fund can be.
As a result, Microsoft and Nvidia will likely have a weight of around 21%, while Apple will fall sharply to about 4.5%, Bartolini said.
That is a change from the prior weightings, which saw Nvidia's weight be kept artificially low by index rules. As of June 14, Microsoft and Apple were both at about 22% each in the fund, while Nvidia was just 6%.