Apple has become the second company to reach a $5 trillion market valuation, buoyed by strong product demand and its avoidance of the costly AI infrastructure race that is weighing on rivals.
The iPhone maker's shares hit a session high of $342.89 on Tuesday, giving it a market capitalisation of $5.04tn (£3.78tn), before easing to $339.68 – around the $4.99tn mark.
AI Stock Sell-off Intensifies
The milestone came amid a global sell-off of AI and semiconductor stocks, driven by rising concerns about borrowing to fund datacentre expansion. On Wall Street, Intel, Advanced Micro Devices, Sandisk, Western Digital and Seagate Technology all fell more than 4%.
The Nasdaq 100 index dropped as much as 1.8%, marking a more than 10% decline from its early June record high – a technical correction.
In South Korea, the stock market slid to its lowest level since mid-April, with SK Hynix and Samsung Electronics falling over 10%.
Apple's AI Strategy Shields It
Apple's decision to sit out the AI spending race has spared it the heavy infrastructure costs that have alarmed investors. The company relies on Google's technology to power services like a revamped Siri, avoiding the need for massive capital expenditure.
Dipanjan Chatterjee, a vice-president and principal analyst at Forrester, said: “Apple has resisted the AI spending race, betting that customer experience – not infrastructure investment – will ultimately determine the winners.”
iPhone Demand and Leasing Programme
Apple's decision to keep iPhone prices steady last month, even as it raised prices for MacBooks and iPads, has bolstered demand as buyers snapped up the flagship device ahead of expected later price hikes.
To further aid demand, Apple launched a device leasing programme in the US through payments firm Klarna, with monthly payments starting at $17.99 for an iPhone, $11.99 for an Apple Watch or iPad, and $24.99 for a Mac. “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,” added Chatterjee.
Stock Performance and Outlook
Apple's shares have jumped 24% so far this year, outperforming the other six of the “Magnificent Seven” tech stocks. The company is set to report third-quarter earnings after the market close on Thursday, with analysts expecting a more than 15% year-on-year revenue increase.
