Will NVDIA rise at the expense of APPLE?

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We have seen in the past few days the NVDIA Corporation (NVDA) to be holding its ground better than other tech giants that got more inflated during the recent run like Tesla.

What we've discovered by running some regression tests among top 30 cap stocks, is a very interesting relationship between NVDIA and Apple Inc (AAPL). Though most people might think that the two have completely parallel paths on their growth, we found out that at times, their correlation has been negative.

Our sample data starts 2 years ago from the October - November 2022 market bottom of the Inflation Crisis. As you can see, this is where the first divergence between the two stocks started, with NVDIA rising to spearhead the recovery to a new Bull Cycle, while Apple was lagging behind and falling.

What followed was a period where naturally both stocks rose, which led to the first 'Bear' stage, what we call Phase 2 where both stocks showed a synchronized weakness (with Apple correcting more however).

Then after a recovery for both to their highs, NVDIA formed a Bull Flag, which led to Phase 3 (similar to the late 2022 price action): Apple topped and started falling aggressively, while NVDIA started an impressive rally.

Again a period of price increase for both stocks followed, which has led to a new Phase 2 (July -October 2024). In line with their 2-year pattern, Apple has been rising since the November U.S. elections, while NVDIA has formed a new Bull Flag.

If the price action continues to replicate this model, then we may see a new Phase 3, where Apple starts to correct while NVDIA's Bull Flag leads to a strong rally.

So do you think potential Apple capital outflows will turn into inflows for NVDIA?

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