Apple overtook Nvidia on Friday to become the world's most valuable company, reshuffling the top ranks of tech heavyweights as investors reassess the outlook for artificial intelligence.
Apple was last valued at $4.88 trillion as its shares held steady, while Nvidia was roughly at $4.86 trillion, following a 3.5% decline.
The shift in the pecking order illustrates that investors are broadening their focus beyond the most obvious beneficiaries of the AI boom, such as Nvidia, which had been at the helm for nearly a year. Apple is reclaiming the top spot for the first time since April last year.
"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 capex intensity and better positioned to monetize AI via services, ecosystem lock-in, and hardware upgrades. The re-rating reflects confidence in earnings durability rather than speculative AI upside."
For a company that was often seen trailing in the AI race, the milestone reflects Apple's efforts to establish itself more firmly among the sector's leading players, and could shape how CEO Tim Cook's final months at the helm are viewed.
Cook is preparing to cede his role to hardware veteran John Ternus in September.
Last month, the company rolled out a long-delayed overhaul of Siri, betting the upgraded assistant would help close the gap with Big Tech rivals and new-age startups in the crucial AI race.
Some analysts say Apple is sitting on an AI gold mine in the form of the personal data that lives on every iPhone. The data could make Siri's answers more useful and the assistant more capable.
The challenge is that such data is locked away in operating systems in the name of privacy and the company would have to find a way to unlock its value.
AI spending lifts new winners
Nvidia became the first company in the world to surpass a $5 trillion market valuation in October, a landmark that propelled it into a rarefied territory that was far beyond the reach of its rivals.
Being superseded by Apple does not necessarily signal a lasting change in the companies' relative standing. The chipmaker remains a major beneficiary of AI-related spending, and its graphics processors are powering much of the generative AI frenzy.
Nvidia could also reclaim the top spot if sentiment shifts.
Besides, Apple is in a delicate position itself, having raised prices to offset rising costs -- a strategy that could hurt demand.
"I don't see any meaningful distinction. Nvidia likely to be a significant participant in whatever happens going forward," said Benjamin Hall, vice president, alpha research at Segal Marco Advisors.
However, the AI enthusiasm has spread to other corners of the semiconductor industry. The bigger winners this year have been memory chipmakers such as Micron, which crossed $1 trillion in market value in May as investors embraced the significance of memory chips in AI infrastructure.
South Korea's SK Hynix, also listed on the Nasdaq earlier this month, adding another player to the race for investor attention.
"The new entrants to the market could spread out the focus away from the pure Magnificent Seven names into a wider number of names," Hall said.
The eye-watering chips rally ran into turbulence in July as investors reassessed the sustainability of the artificial intelligence trade, knocking the Philadelphia SE Semiconductor index down almost 19% from its all-time highs.
Despite the steep fall, the index has performed better than Nvidia so far this year.
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