Apple overtook Nvidia on Friday to become the world’s most valuable publicly traded company, as investors reassessed the outlook for artificial intelligence (AI) and broadened their focus beyond chipmakers that have dominated the AI rally.
Apple’s market value stood at approximately $4.88 trillion, while Nvidia slipped to around $4.86 trillion after its shares fell 3.5%. The move marked Apple’s return to the top spot for the first time since April last year, ending nearly a year of Nvidia’s dominance.
The shift highlights changing investor sentiment as markets increasingly reward companies viewed as having sustainable long-term earnings rather than relying solely on AI infrastructure spending.
Apple benefits from changing AI sentiment
Analysts said Apple, once criticised for lagging behind rivals in generative AI, is now being viewed as a company with significant long-term AI monetisation potential through its hardware ecosystem and services business.
“Apple was seen as a laggard in the AI race because it wasn’t spending to develop models, but now sentiment has changed,” said Toni Meadows, head of investment at BRI Wealth Management.
“Apple is less exposed to capital expenditure intensity and better positioned to monetise AI via services, ecosystem lock-in and hardware upgrades. The re-rating reflects confidence in earnings durability rather than speculative AI upside.”
The company has been accelerating its AI strategy in recent months, including the rollout of its long-awaited Siri overhaul designed to better compete with AI offerings from major technology rivals.
Many analysts believe Apple’s vast ecosystem of iPhone users gives it access to valuable personal data that could significantly improve AI-powered services, although the company continues to prioritise user privacy.
Leadership transition approaches
The milestone also comes during a pivotal period for Apple as Chief Executive Tim Cook prepares to hand over leadership to hardware chief John Ternus in September.
The latest valuation boost could shape perceptions of Cook’s legacy as Apple strengthens its position in the rapidly evolving AI market after years of being viewed as a cautious participant.
Nvidia remains central to AI boom
Despite losing the top spot, Nvidia remains one of the biggest beneficiaries of AI investment worldwide.
The chipmaker became the first company to surpass a $5 trillion market valuation in October, driven by soaring demand for its graphics processing units (GPUs), which power many of today’s generative AI systems.
Analysts cautioned that Friday’s ranking change may prove temporary if investor sentiment shifts again.
“I don’t see any meaningful distinction. Nvidia is likely to be a significant participant in whatever happens going forward,” said Benjamin Hall, vice president of alpha research at Segal Marco Advisors.
AI investment broadens beyond Big Tech
Investor interest has increasingly expanded beyond the largest technology companies into other parts of the semiconductor industry.
Memory chip manufacturers have emerged among this year’s strongest performers, with Micron surpassing a $1 trillion market capitalisation in May amid growing demand for AI memory solutions.
South Korea’s SK Hynix also recently listed on Nasdaq, adding another major player to the expanding AI semiconductor market.
Hall said the arrival of new AI-focused companies could diversify investor attention beyond the so-called “Magnificent Seven” technology stocks.
However, enthusiasm surrounding AI stocks has moderated in recent weeks. The Philadelphia Semiconductor Index has fallen nearly 19% from its record high after investors questioned whether the sector’s rapid gains can be sustained over the longer term.
While Apple now leads global market valuations, analysts expect competition among the world’s biggest technology companies to remain intense as the AI race continues to evolve.