Why investors are suddenly ditching AI’s biggest winner for Apple

A quiet but significant shift is playing out on Wall Street: investors are pulling back from the stocks that powered the artificial intelligence rally and moving toward companies seen as steadier long-term bets. The clearest sign came on Friday, when Nvidia’s shares dropped 3.7%, cutting its market value to about $4.8 trillion and allowing Apple, up 0.4% on the day, to overtake it as the world’s most valuable company at roughly $4.9 trillion, according to a Bloomberg report.

It marks the first time Apple has reclaimed the top spot since Nvidia took it away in May 2025. Bloomberg’s reporting frames the move as part of a broader rotation away from firms that benefited most directly from the AI boom, with Apple emerging as one of the biggest winners of that trend.

The scale of Apple’s turnaround is notable. Its shares have jumped 21% since bottoming out in June and are up 23% for the year, making it the top performer among the ‘Magnificent Seven’ tech giants — ahead of the Nasdaq 100 Index’s 12% gain and the S&P 500 Index’s 8.6% rise over the same window.

Two developments have shaped this moment. On Apple’s side, long-awaited government approval to launch Apple Intelligence in China is expected to boost the company’s prospects in a key market. On Nvidia’s side, reports that Chinese startup Moonshot has built a new AI model capable of rivalling top offerings from OpenAI and Anthropic — both reliant on Nvidia’s chips — have unsettled investors already wondering if AI infrastructure spending is topping out.

Apple also picked up a vote of confidence from HSBC, which upgraded the stock to ‘buy’ from ‘hold.’ Analyst Nicolas Cote-Colisson described Apple as being at an ‘operational turning point,’ arguing it can avoid ‘the (too) high capex debate’ seen elsewhere in tech while capitalising on its 2.5 billion installed devices as its updated Apple Intelligence features arrive.

Apple Park/CC-BY-SA 3.0/by Arne Müseler