July 28, 2026, (Inside AI) — Apple crossed the $5 trillion market capitalization threshold on Tuesday, becoming only the second company ever to do so, as a broad sell-off in AI and semiconductor stocks sent investors fleeing toward the iPhone maker’s perceived safety.
The stock hit a session high of $342.89, pushing its valuation to $5.04 trillion, before settling at $339.91, up 0.9%. The milestone comes just weeks after Apple overtook Nvidia as the world’s most valuable company. Nvidia first breached the $5 trillion mark in October 2025.
Apple’s rally defies a deepening rout in tech. The Nasdaq 100 fell nearly 2% and is now down more than 10% from its early June peak, entering correction territory. Chip stocks bore the brunt: Intel, AMD, Sandisk, Western Digital, and Seagate each dropped over 4%. In South Korea, SK Hynix and Samsung Electronics plunged more than 10%, dragging the Kospi down 11.5% to its lowest since mid-April.
Analysts pointed to a report by The Information that China had begun mass production of homegrown deep ultraviolet (DUV) chip-making tools, stoking fears of cheaper competition. Jing Jie Yu, equity analyst at Morningstar, called the sell-off "largely a kneejerk reaction and overdone."
"We believe the market was likely spooked by the progress of China's chip-making equipment capabilities, and was worried that this progress would threaten the competitive position of global chip making and chip equipment leaders," said Jing Jie Yu, an equity analyst at Morningstar, adding that the sell-off was "largely a kneejerk reaction and overdone".
Meanwhile, Chinese memory chip maker CXMT saw its shares surge 466% on its Shanghai debut Monday, underscoring China’s push for an indigenous AI supply chain. Broader unease lingers over "circular funding" in AI, where firms finance one another, and over massive datacenter borrowing. Apple’s restraint on AI infrastructure spending has become a competitive advantage.
Apple’s struggles to develop in-house AI models forced it to rely on Google’s technology for revamped Siri services, sidestepping the costly datacenter arms race. Its decision to hold iPhone prices steady last month, even as MacBook and iPad prices rose, further buoyed demand. On Tuesday, Apple also launched a device leasing program in the U.S. through Klarna, with monthly payments starting at $17.99 for an iPhone.
"Apple has resisted the AI spending race, betting that customer experience - not infrastructure investment - will ultimately determine the winners," said Dipanjan Chatterjee, a vice-president and principal analyst at Forrester. "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."
Apple shares have jumped 24% this year, far outpacing the rest of the "Magnificent Seven." The company reports third-quarter earnings on Thursday, with analysts projecting a more than 15% revenue jump from a year earlier.
Apple’s AI Abstinence Becomes a Strategic Moat
While rivals burn billions on AI infrastructure, Apple’s capital expenditure restraint is paying off. The company’s reliance on third-party models has insulated it from investor anxiety over AI returns. Apple’s approach aligns with a growing view that AI monetization may come through user-facing experiences rather than raw infrastructure.
China’s Chip Progress Reshapes Competitive Landscape
China’s DUV breakthrough, while not cutting-edge, could erode margins for incumbents in mature nodes. The CXMT listing exemplifies this trend, potentially shifting global supply dynamics and pressuring Korean and U.S. memory makers.
Apple’s leasing program could further lock in users ahead of expected price hikes, sustaining its hardware-driven growth even as the AI narrative evolves. For now, the market is rewarding caution over ambition.
