Nvidia Overtakes Apple in S&P 500: Index Fund Investors Now Hold More Nvidia Shares

Nvidia Corporation has overtaken Apple as the second-largest position in the S&P 500. According to Schwab index rebalancing data, Nvidia's weighting reaches 6.94 percent, while Apple has fallen to 6.45 percent. Microsoft remains in third place with 5.62 percent.

The shift in index weighting has direct implications for billions of dollars in passively managed funds. Index funds and ETFs that track the S&P 500 must adjust their holdings according to the new weighting. This means: more Nvidia shares, fewer Apple shares in the portfolio.

What index weighting means for investors

Index weighting determines what proportion of an index a stock represents. In a market-cap weighted index like the S&P 500, larger companies automatically receive higher weighting. If a company's stock price rises more strongly than the rest of the index, its weighting increases – and vice versa.

For investors in S&P 500 index funds, the reweighting means: every invested dollar or franc now flows to a larger proportion of Nvidia shares than before. The shift occurs automatically through fund rebalancing, without investors needing to take action.

Apple remains a heavyweight despite lower weighting

Despite falling to second place in the index, Apple remains a heavyweight of the technology sector. The company achieves a market capitalization of 4.6 trillion euros and has a net margin of 27.15 percent.

Apple's revenue structure shows strong dependence on the iPhone: 50.4 percent of revenue comes from phone products. A further 26.2 percent is generated from software, maintenance services, and internet access services. Computers contribute only 8.1 percent to total revenue.

Regionally, Apple's net revenue is distributed across America (42.8 percent), Europe, India, the Middle East and Africa (26.7 percent), and China, Hong Kong and Taiwan (15.5 percent). Revenue growth was recently 16.6 percent.

Passive cash flows follow market capitalization

The growing importance of index funds amplifies the dynamics of weighting shifts. When a company's stock price rises, additional funds automatically flow into the stock through rebalancing – regardless of fundamental valuations or business developments.

In August 2026, the market shows differentiated movements: while the Russell 2000 is at record highs, small caps are developing differently from the large technology stocks in the S&P 500. The so-called "Magnificent 7" – which includes both Nvidia and Apple – show different performance patterns.

Nvidia benefits from AI demand

Nvidia's rise to second-largest position in the S&P 500 reflects the company's position as a leading supplier of graphics processors and AI chips. While Apple continues to rely on the iPhone as its primary revenue driver, Nvidia has established itself as a central infrastructure provider for artificial intelligence.

Index weighting reflects market capitalization, not fundamental data. Investors who rely exclusively on passive index funds thus automatically receive higher exposure to the company that most recently gained the most in market value – regardless of valuation metrics or business risks.