On Friday, during the early hours of the trading session, Apple briefly surpassed Nvidia in market capitalization, becoming the world's most valuable company. The gap between the giants narrowed to its smallest since the start of the year, but Nvidia quickly reclaimed the lead. What lies behind this episode, and what fundamental factors are driving the market?
Apple shares (AAPL) surged 1.76%, reaching a record $333.26, while Nvidia shares (NVDA) fell 2.40% to $207.40. As a result, Apple's peak market cap stood at $4.92 trillion, compared to Nvidia's $4.86 trillion. This was only a short-term spike: by the start of the main session, Nvidia had surged ahead again with a market cap of $5.02 trillion versus Apple's $4.89 trillion. The difference between the companies remains minimal—around $130 billion, which is insignificant relative to their combined value.
Opposite Dynamics: AI Sector Under Pressure, Apple in the Green Zone
The key point is the divergent movement of the stocks. Over the past week, AAPL has gained more than 7%, while NVDA has lost nearly 4% over the month due to profit-taking by investors after a historic rally. The Nasdaq 100 heat map clearly shows: Apple is one of the few mega-cap companies in the green zone. The entire chip sector, on the other hand, is under pressure: Alphabet lost 4.44%, Broadcom 5.03%, and AMD 5.33%. The sell-off in AI stocks, which began in early July, continues to intensify.
The reason for this divergence lies in different growth drivers. Apple relies on strong demand for the iPhone 17 and record performance from its services division, which brought in $30.98 billion last quarter. Moreover, shares hit an all-time high amid an AI memory shortage: buyers shifted to the premium segment. For Nvidia, growth rates continue to accelerate: quarterly revenue reached $81.6 billion—85.2% higher than a year ago. The data center segment grew by 199% thanks to capacity expansion by major players for artificial intelligence.
Fundamentally, demand for Nvidia's products remains robust. The Blackwell 300 platform is gaining traction, and TSMC raised its forecast, indicating a steady flow of orders for AI chips. However, investors are taking profits after historic growth, despite NVDA's accelerating business. This is a classic "buy the rumor, sell the news" situation, which, in my opinion, creates interesting entry points for long-term investors.
Apple's Report on July 30: A Decisive Moment for Leadership
The next trigger for the market will be set by Apple. The company reports on July 30, while Nvidia will only release results on August 26. Apple will have a full month to shape the news narrative, while Nvidia will remain influenced by overall market sentiment. Analysts will focus on services growth, revenue from China ($25.53 billion last quarter), and early signals about the iPhone 18—on Polymarket, the probability of its announcement this year is estimated at 96%.
Company valuations shape investor choices. Nvidia trades at roughly 22 times forward earnings, with a PEG ratio of 0.6 and a target of $91 billion in quarterly revenue. Gross margins remain around 75%—much higher than Apple's approximately 49%. Apple commands a multiple closer to 32. This premium is justified by eight consecutive quarters of earnings per share growth, a new $100 billion buyback, and a $30 billion deal with Broadcom that strengthens its position in the chip segment.
Technical Analysis: AAPL Breaks Key Resistance
On the daily chart, Apple shares hit all-time highs on Thursday and Friday—the latest peak recorded at $334.68. The price has been rising almost without pause since late June. On Thursday, Apple broke through the key resistance at $315—a level that capped growth in May and mid-July. It could now act as support during potential pullbacks. The upward move began after a bounce from the $275-280 zone on June 26. The daily RSI has risen above 70, indicating a clear dominance of bulls, though such high levels may signal a possible local correction.
Whether Apple retains its leadership will become clear after the July 30 report. Strong results in the "Services" and "China" segments could solidify its success. But if weaknesses emerge, Nvidia will have a chance to surge ahead again before its August report. In any case, the battle for the title of the world's most valuable company continues, and each new quarter will bring new surprises.
My professional opinion: Nvidia's current correction is not a sign of weakening business but rather healthy profit-taking after rapid growth. Apple, in turn, shows remarkable resilience due to revenue diversification. Investors should closely monitor both companies' reports—they will determine who sits on the throne by year-end.