Contrarian bet that Apple overtakes NVIDIA by Dec 31, 2025. The market prices NO at 19c (19% implied), while my estimate is 29%. Edge driven by negative NVIDIA momentum (-11.5% this week), institutional exits (SoftBank, Bridgewater), and 2024 precedent when Apple overtook NVIDIA in similar conditions.
Thesis: NVIDIA Market Cap Position - NO at 19c
Market: Will NVIDIA be the largest company in the world by market cap on December 31, 2025? Position: NO (Apple overtakes NVIDIA) Entry Price: 19c Amount: $15 Date: November 22, 2025
Market Specifications
Resolution criteria from Polymarket: "This market will resolve to 'Yes' if Nvidia is the largest company in the world by market cap on December 31, 2025, as of market close. Otherwise, this market will resolve to 'No'." Resolution source is consensus of credible reporting. The measurement occurs at NYSE close (4:00 PM ET) on December 31, 2025.
Current standings as of November 22, 2025: NVIDIA at $4.347T (#1), Apple at $4.029T (#2), Alphabet at $3.617T (#3), Microsoft at $3.509T (#4). The gap between NVIDIA and Apple is $318B, representing 7.9% relative difference. Time to resolution is 39 calendar days, approximately 27 trading days.
Probability Estimate
P_final = 71% (NVIDIA maintains #1)
This implies a 29% probability that Apple overtakes NVIDIA by December 31. The market prices NO at 19c, implying only 19% probability of Apple winning. The 10 percentage point difference between my estimate (29%) and the market (19%) represents the identified edge.
Confidence interval: [62%, 82%] at 80% confidence. The interval width reflects uncertainty in predicting relative stock performance over 39 days.
Core Thesis
The market underprices Apple's probability of overtaking NVIDIA because it underweights three observable factors: 1) current negative price momentum in NVIDIA, 2) institutional exits from NVIDIA positions, and 3) the precedent from November-December 2024 when Apple overtook NVIDIA in similar conditions.
Factor 1: Negative Momentum
NVIDIA is down 12.75% from its all-time high of $207.04 reached on October 29, 2025. The stock dropped 7% on November 22 alone and 11.5% over the past week. This is the worst monthly performance since March 2025. The post-Q3 earnings selloff occurred despite NVIDIA beating revenue estimates ($57B vs $55.2B expected) and raising Q4 guidance to $65B.
The selloff pattern suggests the market is repricing NVIDIA independent of fundamentals. A stock that drops on positive earnings is telling you something about positioning and sentiment, not about the business.
Factor 2: Institutional Exits
SoftBank sold its entire $5.83B NVIDIA stake in Q3 2025. Bridgewater reduced its position by 66%. Thiel Macro exited completely. Coatue reduced by 14%. These are large, sophisticated investors with information advantages. While institutional moves can reflect profit-taking rather than directional views, the breadth and magnitude of exits is notable.
Michael Burry (of "Big Short" fame) holds $187M in NVIDIA puts as of the most recent 13F filing. Ray Dalio publicly stated NVIDIA is "80% into bubble conditions" while advising not to sell yet.
Factor 3: 2024 Precedent
In November 2024, NVIDIA led Apple by approximately 0.9% ($3.43T vs $3.40T). By November 26, Apple had overtaken NVIDIA. Apple finished 2024 as #1 with $3.8T vs NVIDIA's $3.3T, a 15% gap.
The current 7.9% gap is approximately 9 times larger than the 2024 gap when leadership changed. This is the primary argument against my thesis: the current gap is larger. However, NVIDIA's monthly 1-sigma move is 8-10% based on 41.95% annualized volatility. The gap is within one standard deviation of normal monthly price movement.
Mechanism for Apple Win
For Apple to overtake NVIDIA, the relative gap must close by at least 7.9%. This can occur through three pathways:
Pathway A: NVIDIA declines while Apple remains flat. NVIDIA would need to fall approximately 15% from current levels. Given NVIDIA is already down 13% from ATH with negative momentum, this is within recent observed behavior.
Pathway B: Apple rallies while NVIDIA remains flat. Apple would need to rise approximately 8.6%. Apple is near all-time highs ($271.56) with analyst targets suggesting 1.8-8% upside. This pathway is less likely given limited near-term catalysts.
Pathway C: Combined movement. NVIDIA falls 8% while Apple rises 4%. This requires both stocks to move in character: NVIDIA volatile to the downside, Apple steady with buyback support. This is the most likely overtake scenario.
Key dates: December 10 Fed rate decision introduces macro volatility. December 18 delayed CPI release. Santa Claus rally period (December 25-31) has failed in both 2023 and 2024.
Counter-Arguments
The strongest arguments against this position:
Gap size: 7.9% is meaningfully larger than the 0.9% gap in November 2024 when Apple overtook NVIDIA. The precedent may not apply at this scale.
No Apple catalyst: Apple's holiday sales data releases January 29, 2026, after resolution. Without a catalyst, Apple rallying 10%+ is unlikely. Services growth (+15%) and buybacks ($70.5B in 9 months) provide steady support but not explosive upside.
Analyst consensus: 38 of 40 analysts rate NVIDIA "Strong Buy" with average price target of $255, implying 40%+ upside from current levels. The analyst community does not share concerns about near-term downside.
Fundamentals remain strong: NVIDIA reported Q3 revenue of $57B (beat by 3.84%), EPS of $1.30 (beat by 4%), and guided Q4 to $65B. Blackwell chips are sold out through mid-2026. CEO Jensen Huang claims $500B in orders for 2025-2026.
These counter-arguments explain why this is a small position (1.5% of bankroll) rather than a larger bet.
Position Sizing
Kelly criterion calculation for NO at 19c with P_final = 29%:
Odds (b) = 0.81 / 0.19 = 4.26 Kelly f* = (4.26 * 0.29 - 0.71) / 4.26 = 12.3%
Applying 1/4 Kelly for volatility reduction yields 3.1%. Applying additional 50% discount for market disagreement yields 1.5%. On $990 bankroll, position size is $15.
Maximum loss: $15 (1.5% of bankroll) Potential profit if correct: $64 gross, $49 net (5% of bankroll)
Decision Matrix
| Outcome | Probability (my est.) | P&L |
|---|---|---|
| NVIDIA #1 (I'm wrong) | 71% | -$15 |
| Apple #1 (I'm right) | 29% | +$49 |
Expected value: (0.29 * $49) + (0.71 * -$15) = $14.21 - $10.65 = +$3.56
The bet has positive expected value if my probability estimate is correct. The position is sized small enough that being wrong does not materially impact the bankroll.
Monitoring
Events that would change this thesis:
Increase position if: NVIDIA drops another 5%+ before I can enter, widening the implied edge. Apple announces unexpected positive catalyst. Additional institutional exits reported.
Close position if: NVIDIA rallies 10%+ and gap widens to 15%+. Apple experiences negative catalyst (supply chain issues, demand miss). My thesis clearly invalidated by new information.
Hold to resolution if: Range-bound trading continues. No major catalysts emerge. Gap remains between 5-12%.
Summary
This is a contrarian position betting that the market underprices NVIDIA's downside risk. The thesis rests on observable momentum (NVIDIA down 11.5% this week), institutional behavior (major exits from SoftBank, Bridgewater, Thiel Macro), and historical precedent (2024 leadership change).
The position is sized conservatively at 1.5% of bankroll, reflecting uncertainty in the thesis and respect for market pricing. At 19c, the risk/reward is asymmetric: risk $15 to potentially profit $49.
The bet is wrong if NVIDIA stabilizes or rallies, which remains the base case at 71% probability. The bet is right if current negative momentum continues and Apple's steady performance closes the gap by year end.