Apple has become only the second company in history to pass the $5tn valuation mark, as a wave of investors fled AI and semiconductor stocks amid a wider tech sell-off. 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 back to $340.08 – still up 0.94% and hovering around the $5tn threshold.
The rally has been driven as much by strong demand for Apple’s products as by its decision to sit out the AI spending race that is draining cash flows at big tech rivals. Apple became the world’s most valuable company earlier this month, overtaking chip giant Nvidia, which had held the top spot since June 2025 and became the first company ever to breach $5tn last October.
“Apple becomes second company to reach $5tn amid investors fleeing AI stocks.”
Apple’s fresh high came amid an intensifying sell-off of AI stocks around the world, fuelled by rising concerns about AI companies’ borrowing to fund datacentre expansion. US chip stocks extended their losses when Wall Street opened on Tuesday, with Intel, Advanced Micro Devices, Sandisk, Western Digital and Seagate Technology all down by more than 4%. The Nasdaq 100 index fell by as much as 1.8% at one point, meaning since its early June record high it had fallen more than 10% – the technical definition of a market correction.
South Korea’s stock market slid to its lowest level since mid-April, with semiconductor companies SK Hynix and Samsung Electronics falling by more than 10%. Analysts attributed the sell-off to renewed worries over AI investment spending and competition from cheaper Chinese companies, after a report by the Information that China had begun mass production of homegrown deep ultraviolet (DUV) chip-making tools.
Investors may also be growing jittery about the “circular funding” at the heart of the AI industry, through which artificial intelligence companies finance one another. They were spooked further by Google’s announcement last week that it was increasing capital spending this year to as much as $205bn to fund its AI plans, while reporting negative free cashflow for the first time in its history, burning through $5.9bn in the three months to the end of June.
Apple has been shielded somewhat by being something of an AI laggard – its difficulties in developing in-house models meant it has avoided the enormous capital outlays that are now rattling investors. The question now is whether the AI sell-off deepens further, or whether Apple’s newfound valuation can hold as the tide turns against the very technology that propelled markets to record highs.