As doubts spread over the massive artificial intelligence (AI) investments by big tech companies, the New York stock market has entered a breather-style phase centered on the semiconductor sector. In particular, selling pressure has continued around chip-related stocks, shaking even the No. 1 market capitalization position of Nvidia, the sector’s leader. In this process, an ironic situation is unfolding in which the valuation of Apple, a big tech company assessed to have invested relatively less in AI, is rising rapidly. On Wall Street, the mood is that a technical bear market will continue for the time being until signals emerge that the AI infrastructure investments of hyperscalers (mega-scale cloud operators) can translate into actual profits.
Apple Overtakes Nvidia in Market Cap Intraday for First Time in About a Year… Weak AI Investment Emerges as Strength in Correction
On the New York stock market on the 17th (local time), Nvidia, the world’s largest company by market capitalization, closed down 2.21% from the previous trading day. In contrast, Apple, the No. 2 company by market cap, rose 0.14% — effectively the only major big tech company to gain — even as the Nasdaq Composite Index fell 1.40%, offering a striking contrast. Amid the diverging stock prices, the market cap gap also narrowed to $4.908 trillion for Nvidia and $4.9017 trillion for Apple. At one point during the session, Nvidia’s stock fell more than 3%, reversing the market cap ranking of the two companies. Apple’s rise to the world’s No. 1 market cap position comes one year and three months after it lost the top spot to Nvidia in April last year.
What separated the direction of Nvidia’s and Apple’s stocks was Wall Street’s assessment of AI investment and its actual benefits. Recently, Wall Street forecasts that the growth in this year’s AI investment spending by the five largest hyperscalers — Amazon, Google parent Alphabet, Microsoft (MS), Facebook parent Meta, and Oracle — will slow for the time being as it has surged. If the pace of increase in infrastructure investment such as AI data center construction slows, demand for the semiconductors that go into it can naturally cool as well.
Earlier, Nvidia surpassed Apple and Microsoft starting in June last year to cement its position as the immovable No. 1 listed company by market cap. Then, on October 29 of the same year, riding the AI investment boom, its market cap exceeded $5 trillion (about 7,500 trillion won) for the first time in history. After undergoing one round of correction late last year and early this year amid a so-called “bubble theory,” Nvidia broke through the $5 trillion market cap barrier once again on April 24. During this period, the company that briefly challenged Nvidia’s dominance was not Apple but Alphabet, backed by its AI model “Gemini” and its own semiconductor Tensor Processing Unit (TPU).
In the meantime, Apple was treated by the market as a company past its prime in the AI era. Apple had originally planned to launch its next-generation “Siri” AI assistant service last year but delayed it to this year. As a result, Apple was pushed down to third place overall on January 7 as its market cap fell behind Alphabet’s. It was the first time Apple’s market cap had been overtaken by Alphabet in seven years, since January 29, 2019. As the situation worsened, CEO Tim Cook, who has led Apple since 2011 as successor to the late former CEO Steve Jobs, ultimately became a target for replacement after 15 years. Starting September 1, John Ternus, senior vice president of engineering and a former hardware engineer, is set to lead Apple.
While Chip Stocks Retreat on Overinvestment Concerns, Aims to Expand Smartphone Market Share
Nvidia and Apple again received opposite assessments as Wall Street reevaluated the stock prices of AI-related shares. Nvidia went downhill once more as its failure to reenter the Chinese market coincided with the AI overinvestment theory. Nvidia’s current stock price of $202.81 is down 14.0% in two months from its high of $235.74 on May 14. The Philadelphia Semiconductor Index also plunged 20.2%, from 14,634.72 on the 22nd of last month to 11,673.89 on the 17th of this month.
On the 8th of this month, Bloomberg reported that based on the 7th’s stock price ($196.93), Nvidia’s 12-month forward price-to-earnings ratio (PER) stood at just 18 times, the lowest level since early 2019. Although Nvidia continues its march of record earnings this year, Wall Street effectively views that the stock price will not be linked to this for the time being.
In contrast, Apple’s stock rose vertically from $275.15 on the 25th of last month — when it recorded a previous low after announcing it would raise prices of products such as the Mac and iPad — to $333.74 on the 17th of this month. The return reached 21.3% in less than a month. Rising for three consecutive trading days recently, its market cap has also set record highs day after day.
John Ternus, senior vice president of engineering, who is set to become Apple’s chief executive officer (CEO) starting in September. Reuters-Yonhap News
Nvidia CEO Jensen Huang. Yonhap News
Craig Federighi, senior vice president considered Apple’s most publicly recognized executive aside from CEO Tim Cook. Federighi, who leads Apple’s software division, is seen as having contributed to the company falling behind in the artificial intelligence (AI) race despite his background as a developer. Apple subsequently, under Federighi’s leadership, adopted Google’s “Gemini” as the foundation model for its AI system on Jan. 12 (local time) this year. EPA-Yonhap News
OpenAI CEO Sam Altman. Reuters-Yonhap News
Apple CEO Tim Cook. AFP-Yonhap News
Apple’s stock rise appears to have been interpreted, rather, as being helped by the fact that it lagged in the AI competition. This means that, although not intended, Wall Street is ultimately giving high marks to the fact that it refrained from excessive investment.
There is also an analysis that the surge in memory chip prices that triggered the product price increases is not necessarily bad news for Apple. The view is that it will push other low- and mid-priced brands with fragile supply chains out of the market, helping expand Apple’s market share over the long term. In fact, investors are also paying attention to the foldable iPhone, expected to be released this September, as a new growth driver. Apple is also known to have recently notified its partners to raise this year’s foldable iPhone production target from the previous 7 million to 8 million units to about 10 million units. Apple’s revenue and net profit for fiscal year 2026 (October 2025 to September 2026) are also projected to grow 15% and 17%, respectively. This is the fastest growth rate since 2021. Free cash flow (FCF) is also expected to reach a record high of $140 billion, up more than 40% from last year.
According to Bloomberg on the 1st, Apple is also conducting chip purchase negotiations with two Chinese memory chip makers recently placed on the U.S. Department of Defense blacklist — ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC). Both are companies on the “1260H List,” which the U.S. Department of Defense designated as companies supporting China’s People’s Liberation Army. While the government cannot directly block Apple’s purchase of Chinese-made semiconductors, there is clearly an invisible political barrier.
If Apple purchases semiconductors from CXMT and YMTC, Apple’s memory chip suppliers will increase from the current three to five. Currently, Apple relies solely on Samsung Electronics (005930.KS), SK hynix (000660.KS), and Micron for memory chips. CEO Cook is also known to have directly asked Trump administration officials, including U.S. Treasury Secretary Scott Bessent, to ease the political fallout that could arise if the deal is concluded.
Not Abandoning AI… Continues Various Attempts Including Custom Chips, M&A, China Push
While reaping stock-price benefits as its conservative investment was reevaluated, Apple has not completely abandoned its AI response. Because the AI era will inevitably come over the medium to long term, Apple too is not halting its attempts to find new breakthroughs.
Apple recently extended its custom chip (ASIC) partnership with Broadcom, which began in 2023, to 2031. It then announced a multi-year contract with Broadcom worth $30 billion (about 45 trillion won) and said it would build a supply chain to produce 15 billion U.S.-made chips. Apple noted that Broadcom is participating in the “American Manufacturing Program (AMP)” it launched last year, introducing this contract as the largest AMP agreement Apple has ever signed. Accordingly, Broadcom also plans to spend $1.5 billion (about 2.3 trillion won) to expand a manufacturing facility in Fort Collins, Colorado, that produces Apple’s wireless communication components.
On the 8th of this month, CEO Cook stressed that this partnership is part of the U.S. semiconductor industry revival advocated by President Donald Trump, saying, “I am deeply grateful to the president and the administration for supporting an important project.” CEO Cook
