Apple overtakes Nvidia in market value on a data-center rules bet

How did Apple pass Nvidia in market value?

Apple Inc. (Nasdaq: AAPL) ended the week worth more than Nvidia Corp. Market value is the share price multiplied by every share a company has issued.

Why it matters: After Friday's close, Apple's market value stood at $5.2 trillion. Nvidia's (Nasdaq: NVDA) stood at $3.9 trillion.

By the numbers: Apple's shares gained 4.1% over the week, adding $200 billion in value. The stock closed Friday at $356.27, its 52-week high, meaning the highest price of the past year.

Nvidia went the other way. Its shares tumbled 12.7%, and the company lost $570 billion in value. The stock finished at $162.85, down 31.9% from its 52-week high of $239.24.

Why did the stocks move in opposite directions?

CNBC tied the split to data centers, the large computing sites that run cloud and online services. Spending on those sites matters far more to Nvidia's business than to Apple's.

CNBC reported that Apple's lower reliance on data-center spending could favor it if rules governing data centers tighten. Apple sells mostly phones, computers and services to consumers, so a squeeze on data-center buyers might reach it less directly.

The argument rests on a possibility, not on a rule that has already changed. If data-center rules stay as they are, the case CNBC described may carry less weight for either stock.

How did the week unfold day by day?

Monday set the pattern. Apple jumped 2.4% and Nvidia tumbled 4.3%. That came on a day the S&P 500 jumped 2.3%.

Nvidia tumbled again on Tuesday, by 5.5%. Apple slipped 0.6%. Wednesday interrupted the split: Nvidia jumped 2.9% and Apple jumped 2.0%.

The gap reopened on Thursday. Nvidia tumbled 4.3%. Apple edged down just 0.2%, a far smaller loss for the iPhone maker.

On Friday, Apple rose 0.4% and Nvidia slid 2.0%. That day alone, Apple added $20 billion in value and Nvidia lost $80 billion. The wider tech group was weak too: the technology sector fund slid 2.0%.

What does the swap mean for an index fund?

An index fund owns every stock in an index, weighted by size. That makes both companies large holdings in most broad stock funds.

Apple makes up 5.8% of the combined value of the 500 largest U.S. companies. Nvidia makes up 4.4%.

On Friday, Apple's gain added $23 to $100,000 spread across those companies by size. Nvidia's drop took away $89, more than Apple put back. The S&P 500 fell 0.4% that day.

Over the full week, the broad market still gained. The S&P 500 jumped 2.5%, and the tech-heavy Nasdaq-100 gained 3.5% despite Nvidia's slide. For single stocks, the gap was far wider: a $100,000 stake in Apple gained $4,060. The same sum in Nvidia lost $12,750.

What could change the picture next?

Nvidia's quarterly results are scheduled for Tuesday, Nov. 17. They may show how data-center demand is holding up, the spending CNBC said Apple depends on less.

The same morning, October retail sales are due at 8:30 a.m. ET. The report may show whether shoppers kept spending, which bears more directly on a consumer-facing company like Apple.

Interest rates are another moving part. The 10-year Treasury yield rose 29 basis points over the week to 5.15%. Minutes from the Fed's October meeting, due Wednesday, Nov. 18, at 2 p.m. ET, may add detail on rate thinking.

For Apple holders, the question is whether the lead rests on Apple's own sales or on Nvidia's slide. For Nvidia holders, it is whether any tighter data-center rules arrive at all.