Apple briefly overtakes Nvidia as world's most valuable company amid AI sentiment shift

The overtaking

Apple's valuation reached $4.88 trillion on Friday while Nvidia slipped 3.5% to $4.86 trillion, briefly reclaiming the top spot for the first time since April 2025. Nvidia had held the lead for nearly a year and was the first company to surpass a $5 trillion market valuation in October 2025. The lead was short-lived; Nvidia's stock recovered some losses and the chipmaker edged back ahead later in the session.

Why sentiment shifted

Investors are broadening their focus beyond AI infrastructure providers. Apple was long seen as an AI laggard, but its lower capital expenditure is now viewed as an advantage. Toni Meadows, head of investment at BRI Wealth Management, told Reuters that Apple is "less exposed to capex intensity and better positioned to monetize AI via services, ecosystem lock-in, and hardware upgrades."

Apple was seen as a laggard in the AI race because it wasn't spending to develop models, but now sentiment has changed.

Michael Monaghan, founder of Founder ETFs, told Al Jazeera that the market now rewards companies that can "turn compute into experiences and outcomes the customer will pay for." Apple's stock has risen 23% year-to-date, the best performance among the so-called Magnificent Seven.

Siri overhaul and Tim Cook's exit

Apple's revamped Siri assistant, unveiled last month and publicly debuted last week, is central to the renewed AI narrative. Test users were impressed, though the EU will not get the software initially due to privacy concerns around opening operating systems to other AI providers. The milestone comes as CEO Tim Cook prepares to hand over to hardware chief John Ternus in September, shaping the final months of his tenure.

Nvidia's headwinds

Nvidia's 4% drop reflected profit-taking, speculation about Chinese companies boosting chip production, and dilution from new share and bond issuances. J.P. Morgan analysts described chip stocks as "wobbling." Concerns about AI hyperscaler spending sustainability and Nvidia's revenue growth peaking also weighed on sentiment. Chinese startup Moonshot's debut of its Kimi K3 model on Thursday added competitive pressure.

Broader semiconductor landscape

AI enthusiasm has spread to memory chipmakers: Micron crossed $1 trillion in market value in May, and South Korea's SK Hynix listed on Nasdaq. The Philadelphia Semiconductor Index fell nearly 19% from its historic highs in July. Apple's price increases to offset rising costs could pressure demand, but its lower AI capex is now seen as a buffer.

What's next

Apple reports third-quarter earnings on July 30, with sales growth forecast at 14% to 17%. Nvidia could reclaim the top spot if sentiment shifts again. Benjamin Hall, vice-president of alpha research at Segal Marco Advisors, said Nvidia is "likely to be a significant participant in whatever happens going forward." The brief reshuffling underscores a market in transition, but neither company's fundamental position has changed dramatically.