Apple is world's most valuable company again: How AI is the reason for Nvidia's 'loss'

Apple overtook Nvidia on Friday (July 17) to reclaim its crown as the world's most valuable public company. The milestone marks the first time Apple has held the number-one spot since April of last year, signaling a significant shift in how Wall Street is betting on the future of artificial intelligence (AI). The major reshuffling at the top of the global tech ladder comes as Nvidia’s slide below Apple due to a broader, industry-wide reality check. By the close of Friday's trading session, Apple's market valuation held steady at a staggering $4.88 trillion. Meanwhile, Nvidia's valuation slid to roughly $4.86 trillion following a sharp 3.5% single-day decline in its stock price, as per news agency Reuters.Apple has surged 22% this year as investors reward its AI agenda and light capital spending model. Meanwhile, Nvidia has gained 7% and largely sat on the sidelines as Wall Street pivots to the memory chip and infrastructure stage of the data center buildout. That’s benefited memory stocks such as Micron Technology and Sandisk, CNBC reported.Reason why Apple surged past NvidiaThe change indicates that investors are shifting their focus beyond the hardware makers that dominated the initial wave of the AI boom. Apple’s recent surge is fueled by a new wave of optimism surrounding its consumer product ecosystem. For example, last month, Apple rolled out its long-delayed intelligence overhaul for Sir virtual assistant, aiming to close the competitive gap with Big Tech rivals.Further, the privacy narrative around data in the age of AI makes Apple’s case stronger. However, the tech giant still faces an engineering challenge. Apple has historically locked this personal data away within its operating systems to protect user privacy, the company will have to carefully find a way to unlock its analytical value without compromising its core privacy promises.Nvidia’s ‘loss’ is due to ‘chip rotation’Investors this week began aggressively rotating their money out of the biggest winners of the recent tech rally, sending semiconductor stocks toward their steepest weekly decline in more than a year, Reuters said. The sudden semiconductor jitters were felt globally on Friday as investors pulled back from high-flying, AI-exposed hardware portfolios:Nvidia fell 3.4%, losing its crown; Advanced Micro Devices (AMD) slid 4.9%; Applied Materials fell 6.5%, and memory chip manufacturing favorites Micron and SanDisk each shed around 1%. Meanwhile, South Korea's SK Hynix saw its U.S.-listed shares briefly dip below their offering price before clawing back to finish 4% higher, though the stock remained down 5% for the week.Get the latest technology news and updates. Download the TOI App.