On Tuesday, Apple briefly reached a $5 trillion market capitalization for the first time, just a day after surpassing Nvidia to become the most valuable publicly traded company.
Shares of the iPhone maker, which is scheduled to report quarterly results on Thursday, have surged 25% this year, outperforming its large-cap peers. The stock peaked at $342.89 on Tuesday before retreating slightly.
While industry giants like Alphabet, Amazon, Meta, and Microsoft are investing hundreds of billions of dollars this year in capital expenditures to develop their artificial intelligence capabilities, Apple has maintained relatively low capex spending, leveraging cloud infrastructure and AI technology from Google.
Last year, Apple lagged behind its trillion-dollar peers amid investor concerns that the company was missing out on the AI boom by holding back on investments and delaying the launch of an upgraded Siri, expected this fall alongside new iPhone models. However, recent developments have shifted the narrative, with worries mounting that the heavy spending by other tech giants is leading to increased debt and negative cash flow without a clear path to substantial returns.
The ongoing contest for market cap dominance between Apple and Nvidia reflects the broader debate over AI’s future. Nvidia, which produces graphics processing units that power most major AI models, became the first company to reach a $5 trillion valuation in October. Nonetheless, its stock has underperformed this year, gaining only 6%.
Source (CNBC)
