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Can Nvidia overtake more of the S&P 500?: Chart of the Day

Evercore ISI Research recently released a note claiming Nvidia (NVDA) could potentially become 10-15% of the S&P 500 (^GSPC). Can it overtake its competitors like Apple (AAPL) and Microsoft (MSFT)?

Yahoo Finance Anchor Julie Hyman takes a look at the numbers and breaks down Nvidia's position in the market for Monday's chart of the day.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Nicholas Jacobino

Video transcript

The presence of NVIDIA in the S and P 500 forecast to grow the A I darling, potentially outshining others in the generational computing cycles.

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Yahoo Finance's Julie Hyman joins me now with a closer look, Julie, thanks Josh.

Well, this comes to us from Julian Emanuel's upgrade of his forecast for the S and P 500 to 6000.

It is a treasure trove of charts but I did pick this one which actually comes via ever Corps semiconductor analyst, Mark Lape.

So basically, Mark looked at meetings of various dominant companies in their various generational compute cycles.

What does that mean?

Well, he looked at what he called the mini computer era when DEC had a waiting of about 1% in the S and P 500.

Then Nokia with the feature phone era and it's waiting about 2% in 2000 when it reached its peak, waiting in the S and P 500 Microsoft during its first era of dominance in 2007, the PC era.

Then Microsoft was about 3% of the S and P 500 Apple.

Of course, the smartphone era there in 2015 Apple um accounted about 4% and then you fast forward to today.

And what Lopez puts at the other sort of compute generational computing cycles.

Again, the smartphone era sort of the newer wave of the smartphone era, the data center and server server era, which he says Microsoft is benefiting from and then the A I and parallel processing era.

So what does all of this mean?

You notice these bars all going up during these various generational computing cycles as these companies accounted for more and more of the S and P 500.

So lopes extrapolates for NVIDIA if we continue to see this upward trajectory could be as much as 15% of the S and P 500 as it continues to climb in its market cap.

I mean, this makes sense given some of the forecasts, we've heard Josh for what the market cap of NVIDIA could eventually get to and we've already seen it.

Um sort of vying with the top three here.