Apple becomes second $5tn company as investors flee AI stocks

Apple’s shares hit a session high ⁠of $342.89 on Tuesday. Photograph: Matthias Schräder/APView image in fullscreenApple’s shares hit a session high ⁠of $342.89 on Tuesday. Photograph: Matthias Schräder/APAppleApple becomes second $5tn company as investors flee AI stocksShare price rally driven by strong product demand as well as decision to sit out AI spending race, amid wider tech sell-off

Apple has become only the second company to pass the $5tn valuation mark, as it benefited from investors fleeing AI and semiconductor stocks amid a wider tech sell-off.

The iPhone maker’s shares hit a session high ⁠of $342.89 on Tuesday, giving it a market ⁠capitalisation of $5.04tn (£3.78tn), then eased back down to $340.08 – around the $5tn mark.

Apple became the world’s most valuable company earlier this month, overtaking the chip giant Nvidia, which had been ⁠at the top since June 2025 and became the first company to breach the $5tn threshold last October.

The US consumer electronics company’s rally has been driven ⁠as much by strong demand for its products as its decision to sit out the ​AI spending race that is sapping cash ‌flows at big tech ‌rivals.

Its fresh high valuation came amid an intensifying sell-off of AI stocks around the world driven by rising concerns about AI companies’ borrowing to fund datacentre expansion.

US chip stocks extended their recent losses when Wall Street opened on Tuesday, with Intel, Advanced Micro Devices, Sandisk, Western Digital and Seagate Technology all down by more than 4%.

The Nasdaq 100 index of leading tech stocks fell by as much as 1.8% at one point, meaning since its early June record high it had fallen more than 10% – the technical definition of a market correction.

Meanwhile South Korea’s stock market slid to its lowest level since mid-April, with semiconductor companies SK Hynix and Samsung Electronics falling by more than 10%.

Analysts attributed the sell-off to renewed worries over AI investment spending, and competition from cheaper Chinese companies, after a report by the Information that China had begun mass production of homegrown deep ultraviolet (DUV) chip-making tools.

View image in fullscreenApple’s decision to hold iPhone prices steady, despite increases last month for MacBooks and iPads, has bolstered demand. Photograph: Lucas Jackson/ReutersInvestors may also be growing jittery about the “circular funding” at the heart of the AI industry, through which artificial intelligence companies finance one another.

They have also been spooked by the announcement from Google last week that it was further increasing capital spending this year to as much as $205bn to fund its AI plans, while reporting negative free cashflow for ​the first time in its history, burning through $5.9bn in the three months to the end of June.