Apple Tops $5 Trillion Market Cap

[Financial News]  

Apple's market capitalization surpassed $5 trillion for the first time on the 28th local time, making it only the second company to reach the milestone after NVIDIA.
According to the Financial Times, Apple shares rose as much as 1.3% intraday to $342.89, pushing its market value past the $5 trillion mark.
While other big tech stocks, including semiconductors, have struggled amid concerns over artificial intelligence, Apple, which had been relatively cautious about AI investment, is now reaping an unexpected benefit.
NVIDIA also rose 0.7% on the day, but its market capitalization remained around $4.8 trillion.
Apple regained the No. 1 spot in market capitalization from NVIDIA, which it had lost in May last year, after 15 months.
May marked a turning point in the race for the top market-cap position.
After peaking in May, NVIDIA has struggled amid a recent selloff in semiconductors, cutting its year-to-date gain to around 6%. Apple, by contrast, has climbed steadily this year and is up nearly 25%.
Apple drew concerns that it was falling behind in the competition because it did not aggressively invest in AI infrastructure while the other M7 big tech companies were pouring money into it.
In November 2022, OpenAI ushered in the full-scale AI era with the launch of ChatGPT-3.5. In step with that shift, so-called hyperscalers such as Amazon.com, Inc., Microsoft (MS), Google and Meta Platforms Inc. invested heavily to build massive AI data centers.
Apple, meanwhile, repeatedly stumbled in the AI development process and wasted time pursuing small language models for personal devices such as smartphones rather than Large Language Models (LLM), which require large-scale data centers. Because SLMs require less data-center capacity, Apple also lagged in AI infrastructure investment.
In the end, those missteps helped pave the way for Apple to reclaim the No. 1 market-cap spot and break through the $5 trillion valuation.
Exhausted investors have begun demanding returns on AI spending, and hyperscalers have taken a hit. Even so, Alphabet Inc., Google's parent company, said in its earnings release last week that it plans to raise capital expenditures this year to as much as $205 billion, warning that free cash flow to the firm (FCF) could fall by as much as $5.9 billion into negative territory as a result.
Apple will release its earnings after the market closes on the 30th.


[email protected] Song Kyung-jae Reporter