Apple briefly tops $5 trillion valuation as AI sell-off rattles tech stocks

Milestone moment

Apple's stock surged to a session high of $342.89 on Tuesday, pushing its market capitalization to $5.036 trillion. The move made it only the second company ever to reach that valuation, after Nvidia, which first breached $5 trillion on 29 October 2025. The peak was brief; shares later gave back most of the gain, trading around $337.7 to $340 and leaving the market cap just below or barely above the $5 trillion mark depending on the point in the session. Apple had already reclaimed the title of world's most valuable company the previous day, and the new milestone reinforces a reshuffling of the Silicon Valley hierarchy.

Apple's defensive rally

Apple's 24% year-to-date gain has been fuelled by steady iPhone demand and a deliberate decision to avoid the AI infrastructure spending binge that is sapping cash flows at rival hyperscalers. The company held iPhone prices steady last month while raising prices on MacBooks and iPads, and on Tuesday it launched a device leasing programme in the U.S. with Klarna, with monthly payments starting at $17.99 for an iPhone. Its revamped Siri assistant, powered by Google's AI technology, has drawn broadly positive early reviews.

Apple has resisted the AI spending race, betting that customer experience - not infrastructure investment - will ultimately determine the winners.

Chatterjee, a vice president and principal analyst at Forrester, also said the 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."

AI sell-off and chip rout

The valuation milestone arrived during a sharp sell-off in artificial intelligence and semiconductor stocks. The Nasdaq 100 dropped nearly 2% on Tuesday, now down more than 10% from its early June record, meeting the technical definition of a correction. Chip names were particularly hard hit: Intel, AMD, SanDisk, Western Digital and Seagate all lost more than 4%. South Korea's Kospi index plunged 11.5% to its lowest level since mid-April, dragged down by Samsung Electronics and SK Hynix, which each fell over 10%.

A report that China had begun mass-producing homegrown deep ultraviolet chip-making tools spooked investors already nervous about enormous AI borrowing.

We believe the market was likely spooked by the progress of China's chip-making equipment capabilities, and was worried that this progress would threaten the competitive position of global chip making and chip equipment leaders.

Yu, an equity analyst at Morningstar, called the sell-off "largely a kneejerk reaction and overdone." Alphabet's disclosure last week that it plans to spend as much as $205 billion this year and reported a free cash flow of minus $5.9 billion added to the unease.

Nvidia's fading lead

Nvidia, which had sat atop the market since June 2025, now trails with a market capitalization of roughly $4.76 trillion. Its shares are up only about 5% this year after tumbling from a May peak that briefly valued it at $5.7 trillion. The reshuffle reflects investors' deepening scepticism about how quickly AI capital expenditure will produce returns.

What's next

Apple is set to report its third-quarter earnings after Thursday's close. Analysts expect quarterly revenue to jump more than 15% from a year earlier. The results will test whether the stock's haven appeal can hold while the broader tech sector reckons with oversupply fears and the uncertain payoff from AI spending.