Apple has become only the second company to surpass the $5 trillion valuation mark, benefiting from a broader sell-off in AI and semiconductor stocks. The iPhone maker’s shares hit a session high of $342.89 on Tuesday, giving it a market capitalisation of $5.04tn (£3.78tn), before easing to $339.68, around the $4.99tn mark.
Apple overtakes Nvidia amid tech rout
Apple became the world’s most valuable company earlier this month, overtaking chip giant Nvidia, which had topped the list since June 2025 and became the first company to breach the $5tn threshold last October. The rally in Apple’s stock has been driven by strong product demand and its decision to avoid the heavy AI spending that is draining cash flows at big tech rivals.
The fresh valuation high came as a global sell-off of AI stocks intensified, driven by rising concerns about AI companies borrowing to fund datacentre expansion. US chip stocks extended losses on Tuesday, with Intel, Advanced Micro Devices, Sandisk, Western Digital and Seagate Technology all falling more than 4%.
Nasdaq correction and global impacts
The Nasdaq 100 index of leading tech stocks fell as much as 1.8% at one point, meaning since its early June record high it had dropped more than 10% – the technical definition of a market correction. South Korea’s stock market slid to its lowest level since mid-April, with semiconductor companies SK Hynix and Samsung Electronics falling by more than 10%.
Analysts attributed the sell-off to renewed worries over AI investment spending and competition from cheaper Chinese companies, following a report by the Information that China had begun mass production of homegrown deep ultraviolet (DUV) chip-making tools.
Apple’s AI laggard strategy pays off
Investors may also be growing jittery about the “circular funding” at the heart of the AI industry, through which AI companies finance one another. Google’s announcement last week that it was further increasing capital spending this year to as much as $205bn to fund its AI plans, while reporting negative free cashflow for the first time in its history, burning through $5.9bn in the three months to the end of June, has also spooked markets.
Apple has been shielded by being somewhat of an AI laggard. Its difficulties in developing in-house models meant it has instead relied on Google’s technology to power new services such as a revamped Siri. That has spared it the hefty infrastructure costs that have left big tech investors wary.
iPhone demand bolstered by price strategy
Apple’s decision to hold iPhone prices steady last month, despite increasing prices for MacBooks and iPads, has bolstered demand as buyers scooped up the company’s flagship device ahead of expected price hikes later this year, analysts said. To aid demand, Apple on Tuesday launched a device leasing programme in the US through payments firm Klarna, with monthly payments starting at $17.99 for an iPhone, $11.99 for an Apple Watch or iPad, and $24.99 for a Mac.
“Apple has resisted the AI spending race, betting that customer experience – not infrastructure investment – will ultimately determine the winners,” said Dipanjan Chatterjee, a vice-president and principal analyst at Forrester. “The new leasing programme is a clever response: it doesn’t reduce the price of an iPhone, but it changes how consumers perceive the cost by replacing sticker shock with a predictable monthly payment.”
Apple stock outperforms Magnificent Seven
Including session gains, Apple stock has jumped 24% so far this year, widely outperforming the other six of the “Magnificent Seven” cohort of US technology stocks. Apple is to report its third-quarter earnings after the market close on Thursday, with analysts expecting a more than 15% jump in revenue compared with a year earlier.
