##  [# What Nvidia’s Entry Into the $1T Club Means for ETFs ](/sections/features/what-nvidias-entry-1t-club-means-etfs) 

 

# What Nvidia’s Entry Into the $1T Club Means for ETFs 

 

 

The chip giant is knocking on the door of a $1 trillion market cap.



 

 

 

 

 [![sumit](/sites/default/files/styles/author_image_icon/public/2023-03/Sumit_0.png?itok=SO-7S5SH "sumit")](/authors/sumit-roy) 

[By Sumit Roy ](/authors/sumit-roy)

 May 25, 2023

 Edited by: Lisa Barr

 

 

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The $1 trillion club might have a new member soon. Shares of chip giant Nvidia surged a whopping 27% Thursday after reporting blowout earnings, bringing its market capitalization to the cusp of that exclusive level.

As of this writing, the stock has a market cap of $958 billion, meaning that it needs to rise less than 5% to eclipse $1 trillion.

That’s a big deal, not just for the stock but for the plethora of ETFs that hold Nvidia. For market-cap-weighted funds, the bigger the market cap, the bigger the weighting a stock has.

Today the [**SPDR S&amp;P 500 ETF Trust (SPY)**](/spy) holds a 2.2% weighting in Nvidia, more than all but four stocks, each of which are already in the $1 trillion club—Apple, Microsoft, Alphabet and Amazon.

In the [**Invesco QQQ Trust (QQQ)**](/qqq), Nvidia holds a 5.6% weighting—again, more than any stock other than members of the $1 trillion club.

And in the [**VanEck Semiconductor ETF (SMH)**](/smh), Nvidia has a 15% weighting—the largest of any stock.

## **Equal Weighting** 

The market-cap-weighting scheme contrasts with ETFs that hold all of their stocks at an equal weight. In these equal-weighted ETFs, a stock with a massive market cap like Nvidia is treated the same as a much smaller stock like Bath &amp; Body Works Inc., which has an $8.5 billion market cap.

In the [**Invesco S&amp;P 500 Equal Wght ETF (RSP)**](/rsp), both Nvidia and Bath &amp; Body Works have a 0.2% weighting.

Similarly, in the [**Invesco S&amp;P 500 Equal Weight Technology ETF (RYT)**](/RYT) and the [**SPDR S&amp;P Semiconductor ETF (XSD)**](/xsd), Nvidia’s weighting is 2% and 4%, respectively—about equal to the other stocks in the ETFs.

On a day in which a single large-market-cap stock like Nvidia is surging, market-cap-weighted ETFs benefit. SMH is up 8% versus only 4% for XSD.

But when stocks with smaller market caps outperform, equal-weighted ETFs tend to do better.

*Contact Sumit Roy at sumit.roy* *@etf.com*

 
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 [ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy) 

 

 

  Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including…   [View Bio](/authors/sumit-roy)

 



 

 


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