Apple overtakes Nvidia as world's most valuable company amid chip selloff

Chipmaking giant Nvidia, one of the 'Magnificent Seven' stocks, lost its position as the world's most valuable company to Apple in Friday's trading session following a fresh selloff in semiconductor stocks.

Nvidia, which had held the top spot since May 2025, saw its shares tumble 3.7% on Friday, reducing its market capitalisation to around $4.8 trillion. In contrast, Apple shares rose 0.4%, lifting the iPhone maker's valuation to approximately $4.9 trillion.

Apple has benefited from a broader rotation within the technology sector, as investors shift away from companies heavily exposed to artificial intelligence (AI) infrastructure spending.

Nvidia came under pressure after reports that Chinese AI startup Moonshot had developed a new AI model capable of competing with leading offerings from OpenAI and Anthropic, both of which rely extensively on Nvidia's chips.

The emergence of competitive Chinese AI models has reinforced concerns that the massive wave of spending on AI infrastructure may be approaching its peak.

Adding to Apple's momentum, HSBC upgraded the stock to 'Buy' from 'Hold', saying the company is well-positioned to benefit from the current market environment, according to a Bloomberg report.

Semiconductor stocks enter bear market territory

Chip stocks remained under pressure throughout the week as renewed tensions in the Middle East, coupled with stretched valuations, prompted investors to rotate into other sectors.

The selloff has put the semiconductor sector on track for its worst weekly decline since the tariff-driven market turmoil in April 2025, with the industry's benchmark index falling more than 20% from its recent record high.

The Philadelphia Semiconductor Index (SOX) tumbled 4.8% on Friday, extending its decline from the late-June peak to more than 20%, officially entering bear market territory.

Renewed concerns over the health of the artificial intelligence trade, and whether hyperscalers will be able to continue to pour trillions of dollars into capital expenditures on infrastructure have driven the selloff. Investors are also grappling with the elevated valuations, and if stocks have run up too far, too fast

Despite the sharp correction, the SOX remains up nearly 60% so far this year, significantly outperforming the broader market's 8.6% gain. Analysts also remain overwhelmingly bullish, with the benchmark expected to deliver an average upside of around 38% over the next 12 months, based on the consensus price targets for its 30 constituent stocks, as per the Bloomberg report.

(With inputs from Bloomberg)

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