Apple retakes world's most valuable company as AI doubts knock Nvidia
The iPhone maker climbed to a record $4.95 trillion valuation after investors questioned whether the AI infrastructure boom can deliver the returns markets have priced in.
Apple has reclaimed the title of the world's most valuable company, overtaking Nvidia as investors grow increasingly cautious about the artificial intelligence investment boom.
Apple's shares rose 1.2% on Monday, lifting the iPhone maker's market capitalization to a record $4.95 trillion. Nvidia, meanwhile, fell 5%, reducing its market value to $4.78 trillion, after Bloomberg reported that the cost of insuring the chipmaker's debt against default had risen by a record amount amid concerns over its growing commitments to AI infrastructure investments.
The changing of the guard reflects a broader shift in investor sentiment. After driving the market higher for more than two years, AI-related stocks are facing increased scrutiny as investors question whether the enormous spending on AI infrastructure will ultimately generate adequate returns.
Nvidia, widely viewed as the biggest beneficiary of the AI investment boom, had held the title of the world's most valuable company for more than a year after surpassing Microsoft in June 2025. But its valuation has compressed in recent months. The company now trades at a forward price-to-earnings multiple of 18.2, down from 25.5 at the beginning of the year.
Apple, by contrast, has emerged as one of the market's biggest winners. According to Dow Jones Market Data, its shares have outperformed the Nasdaq 100 by 23 percentage points since the beginning of July and are on track for their strongest month relative to the index since 2005.
As spending on AI infrastructure continues to accelerate, investors are increasingly focused on whether those investments will produce meaningful financial returns.
Last week, Alphabet raised its 2026 capital expenditure forecast, and investors expect other technology giants to follow suit.
Concerns intensified after the Wall Street Journal reported that Nvidia is in talks to provide $250 billion in financing to OpenAI as part of a data center project in Ohio. According to Jefferies, investors view the proposed arrangement as a prominent example of "circular financing," in which financing provided by a supplier ultimately helps generate demand for its own products.
Nvidia also came under pressure after the IPO of Chinese memory chipmaker CXMT triggered a sharp selloff across the semiconductor sector. Investors fear a new Chinese competitor could erode the pricing power of the industry's three dominant memory manufacturers, Micron, Samsung and SK Hynix.
Reports that Apple is considering purchasing DRAM chips from CXMT to help address the global memory shortage added to concerns over increasing competitive pressure.
Apple has steadily gained ground throughout 2026. Its shares have climbed 24% since the beginning of the year, compared with just 4% for Nvidia. Since the start of July alone, Apple has gained 16%, putting the stock on track for its strongest monthly performance in four years.
The company's rise has come despite a global memory shortage that forced it to raise prices for some Macs and iPads. At the same time, iPhone demand has remained resilient. According to Bernstein analyst Stacy Rasgon, Apple's global smartphone market share has increased to 20%, up from 17% a year earlier.
Unlike most of the so-called "Magnificent Seven," Apple has largely resisted dramatically increasing its capital expenditures on AI infrastructure, opting instead to rent computing capacity rather than build large-scale in-house infrastructure.
Although the company was initially criticized for lacking a clear AI strategy, investors now appear to view that restraint as an advantage. All six of the other Magnificent Seven companies are currently trading at least 15% below their peak share prices.
Apple is scheduled to report fiscal third-quarter results on Thursday. Investors will be watching closely for the company's first detailed assessment of how the global memory chip shortage, driven largely by AI demand, has affected its business.
