Apple hits $5tn valuation, second only to Nvidia

Apple has become the second company in history to achieve a market valuation of $5tn. The iPhone maker's shares reached a session high of $342.89 on Tuesday, pushing its market capitalisation to $5.04tn before settling around the $5tn mark. This significant financial milestone places Apple behind only Nvidia, which was the first company to breach the $5tn threshold in October 2025.

Market Correction and Investor Sentiment Shift

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Apple's valuation surge occurred amidst a broader sell-off in artificial intelligence and semiconductor stocks. Concerns over the substantial borrowing by AI companies to fund data centre expansions have led to increased investor caution. US chip stocks, including Intel and Advanced Micro Devices, experienced significant declines. The Nasdaq 100 index, a key indicator of technology stocks, fell by as much as 1.8% during trading, marking a decline of over 10% from its early June record high, which signifies a market correction.

Analysts attribute this market downturn to renewed worries about AI investment spending and increasing competition from Chinese manufacturers. Investors are also reportedly becoming apprehensive about the "circular funding" model prevalent in the AI industry, where companies finance each other. Google's announcement of increased capital spending and its first-ever reported negative free cash flow further contributed to market jitters.

Apple's Strategic Positioning

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Apple has largely avoided the direct impact of the AI spending race, partly due to its reliance on external technology for new services like a revamped Siri. This strategy has spared the company the heavy infrastructure costs burdening some rivals. Furthermore, Apple's decision to maintain iPhone prices while increasing those for MacBooks and iPads has reportedly boosted demand for its flagship device.

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

Dipanjan Chatterjee, vice-president and principal analyst at Forrester

To further stimulate demand, Apple launched a device leasing program in the US through the payments firm Klarna on Tuesday. This initiative offers monthly payments starting at $17.99 for an iPhone, $11.99 for an Apple Watch or iPad, and $24.99 for a Mac. Year-to-date, Apple's stock has climbed 24%, significantly outperforming other major US technology stocks.

Apple is scheduled to report its third-quarter earnings after market close on Thursday. Analysts anticipate a revenue increase of over 15% for the period compared to the previous year.