Relatively restrained capital expenditure wins market favor as Apple Inc. (AAPL.US) overtakes NVIDIA Corporation (NVDA.US) to reclaim the world's largest market capitalization.

As Wall Street's concerns over the returns on Big Tech's massive artificial intelligence (AI) investments continue to heat up, Apple Inc. (AAPL.US) overtook NVIDIA Corporation (NVDA.US) on Friday to reclaim its position as the world's most valuable listed company. Amid a broad selloff in technology stocks, Apple Inc., with its relatively restrained capital expenditure and strong cash flow performance, has become a more defensive technology stock in investors' eyes. On Friday, Apple Inc.'s share price fell 1.2%, closing with a market capitalization of approximately US$5.03 trillion; NVIDIA Corporation's share price fell 4.2%, with its market capitalization dropping to US$4.93 trillion. This is the first time Apple Inc. has returned to the top of the global market capitalization rankings since briefly overtaking NVIDIA Corporation in late July this year. Behind Apple Inc.'s recapture of the top market capitalization spot is a shift in the market's attitude toward Big Tech's AI investment prospects. Recently, major technology companies including Intel Corporation (INTC.US), Amazon.com, Inc. (AMZN.US), Alphabet (GOOGL.US, GOOG.US) and Meta (META.US) have successively reported disappointing financial results or guidance, triggering investor concerns about the technology industry's growth prospects and returns on AI investments. Particularly noteworthy is that as large technology companies continue to invest enormous sums in building AI data centers and other computing infrastructure, the market has begun to question whether these investments can generate sufficient revenue and profit within a reasonable timeframe. The capital expenditure of some technology giants has already exceeded the cash flow generated from their operating activities, turning free cash flow negative. Both Alphabet and Amazon.com, Inc. have already seen this situation and are increasingly relying on the bond market to fund their investments. Meanwhile, rising interest rates have further pushed up corporate financing costs. By contrast, Apple Inc. has not made large-scale investments in AI infrastructure like other technology giants, but has maintained a relatively restrained capital expenditure strategy. This has won it favor among investors as the market re-examines AI investment risks. Data shows that Apple Inc.'s share price has risen 27% cumulatively this year, not only making it the best-performing stock among the "Magnificent Seven" U.S. technology stocks, but also with a gain more than double that of second-ranked NVIDIA Corporation. Meanwhile, Apple Inc.'s cash flow performance is also notably better than that of some technology peers. The market expects Apple Inc.'s free cash flow to grow 38% year-on-year to US$142 billion in fiscal year 2026 ending September 30. Strong cash flow means Apple Inc. does not need to borrow heavily on a large scale like some competitors to support its own business development and shareholder returns. Against the backdrop of rising interest rates and increasing financing costs for technology companies, this advantage is attracting more attention from investors. As Apple Inc. reclaims the world's largest market capitalization, the U.S. technology sector is undergoing a notable correction. Dragged down by disappointing financial results from large technology companies and concerns over AI investment returns, the Nasdaq 100 Index fell 6.7% cumulatively in October, marking its worst monthly performance since March 2025. Among them, AI infrastructure-related stocks suffered particularly severe selling. Data center operators CoreWeave (CRWV.US) and Nebius Group (NBIS.US), which provide AI computing services, both saw their share prices fall more than 30% in October. Intel Corporation's decline was even more severe. After Friday's sharp share price plunge, the stock fell more than 45% cumulatively in October, marking the largest monthly decline in more than 40 years of data compiled by Bloomberg. Overall, Apple Inc.'s overtaking of NVIDIA Corporation again reflects a shift in investors' criteria for evaluating large technology companies. Previously, the market favored companies that actively invested in AI infrastructure and could benefit from the AI boom; now, as capital expenditure continues to climb and financing costs rise, investors are beginning to place greater emphasis on companies' cash flow, profitability and financial soundness. Against this backdrop, Apple Inc.'s relatively conservative AI investment strategy has instead become an important advantage that distinguishes it from other technology giants.