AAPL stock will be on watch amid the Nasdaq 100's special rebalance

$Apple (AAPL.US)$ commands a top spot among investors’ watchlists — and for good reason. AAPL stock currently sports a market capitalization of $2.95 trillion.
The company recently exceeded the $3 trillion market as it continued to carve out new all-time highs. While the stock has seen some mild profit-taking in recent trading, the action has been robust.
Shares still boast a year-to-date gain of 44%. While that lags many of its FAANG peers, it’s the only component of that group to get back to (and exceed) its prior all-time highs.
So why should investors keep an eye on AAPL stock?
On Friday, July 14, the Nasdaq 100 will announce the results of its special rebalancing. The rebalance, which will take place before the market open on Monday, July 17, will take place to “address overconcentration in the index by redistributing the weights.”
This is only the third time the Nasdaq will enact a special rebalance. Previously, it did so in December 1998 and May 2011.
The Nasdaq 100 is weighted by market cap, so it’s not hard to understand how the scales have tipped in recent years and more specifically, in 2023. In addition to FAANG, $Microsoft (MSFT.US)$ , $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$ have appreciated considerably this year.
While much of the market has lagged, these names have been surging to the upside. In fact, the worst performer of this group so far in 2023 is $Alphabet-A (GOOGL.US)$ $Alphabet-C (GOOG.US)$ , despite sporting a 32.7% year-to-date gain.
Thanks to the current rally, the Nasdaq 100’s top seven holdings — Apple, Alphabet, Tesla, Nvidia, Microsoft, $Amazon (AMZN.US)$ and $Meta Platforms (META.US)$ — make up 55% of the index. Apple holds the No. 2 weighting at 12.5%, just behind Microsoft’s 12.9% weighting.

The rebalancing of the Nasdaq 100 will have an impact on Apple headlines, but ultimately, we’re talking about the largest public company on earth. It plays a role in various U.S.-based indices and exchange-traded funds (ETFs), including the $S&P 500 Index (.SPX.US)$ , $Nasdaq Composite Index (.IXIC.US)$ and $Dow Jones Industrial Average (.DJI.US)$ .
The bigger focus for AAPL stock will likely be earnings, which are due up in a few weeks. Currently, Apple is scheduled to report earnings on Aug. 3 after the market close.
With the firm having already provided a product update for investors via its WWDC event in June, earnings are next. Keep in mind, this will be Apple’s fiscal third-quarter results, with its fourth-quarter results due up in the fall.
Analysts expect a down year for earnings and revenue this year, but despite that, investors are gobbling up AAPL stock. Next year’s estimates call for growth, so that will soon be the focus assuming the economy can remain on track.
For what it’s worth, the Nasdaq 100 does not have a poor track record following its prior rebalances — although the same size is pretty small.
When it did so in 1998, its six-month and one-year performances were roughly flat and up about 7%, respectively. In 2011, those figures climbed dramatically, to a gain of roughly 28% over the next six months and roughly 100% over the next year.