The swap reflects a broader rotation among technology investors: for two years the market rewarded companies building AI infrastructure — chips, data centers, networking — and Nvidia rode that wave to become the first company past $5 trillion in October. Now the Philadelphia Semiconductor Index has fallen almost 19% from its highs, and investors are asking whether the AI infrastructure buildout will translate into near-term profit, rotating instead toward companies seen as AI beneficiaries with lower capital intensity.
Apple fits that profile: the company spent just $12.7 billion on capex in fiscal 2025 while generating $98.8 billion in free cash flow, avoiding the AI infrastructure spending race entirely while still benefiting from consumer AI demand. Apple's own AI push — a rebuilt Siri now powered by Google's Gemini technology — received broadly positive early reviews and helped drive the rally, alongside strong iPhone sales (up 22% in fiscal Q2) and reports of an expanded upcoming lineup. The gap between the two stocks had already narrowed to roughly $190 billion earlier in the week before flipping entirely on Friday's session.
The milestone also lands during a leadership transition at Apple, with CEO Tim Cook set to move to an executive chairman role in September, handing the top job to hardware engineering chief John Ternus.
