Apple Briefly Dethrones Nvidia as Most Valuable Company Despite AI Lag

On Friday, Apple briefly overtook Nvidia as the world's most valuable company, with a $4.89 trillion market cap just pipping Nvidia's $4.85 trillion. This marks the first time in over a year that Nvidia has lost the top spot, despite Apple being widely considered an AI laggard. Apple's AI catch-up efforts have been slow: its AI-enhanced Siri only debuted last week after more than a year of delays. Yet analysts argue Apple's conservative capital expenditure on AI is prudent, allowing it to monetize AI through services, ecosystem lock-in, and hardware upgrades rather than overshooting on infrastructure. Strong iPhone sales, even amid global smartphone downturns, have also bolstered investor confidence.

The shift was partly triggered by news from China: AI startup Moonshot released Kimi K3, a 2.8 trillion parameter open-weight model that rivaled costlier US frontier models on benchmarks. The last time such a Chinese model emerged (DeepSeek's R1 in January 2025), Nvidia lost its most valuable company position to Microsoft. Investor fears are now mounting that Nvidia's revenue growth is peaking due to hyperscalers like Microsoft overspending on AI with limited returns. Nvidia CEO Jensen Huang has been trying to ease these concerns, but Friday's market reaction suggests lingering doubts. Meanwhile, Apple's Mac mini has become a go-to device for running open models locally, further positioning Apple as a pragmatic AI player.