Apple overtakes Nvidia as chip selloff pushes SOX into bear market
Apple reclaimed the title of the world's most valuable company from Nvidia as a broader rotation away from artificial intelligence infrastructure pushed the semiconductor sector into bear market territory.
Apple supplanted Nvidia as the world’s most valuable public company on Friday, ending the chipmaker’s reign at the top of the global market hierarchy. Nvidia shares dropped 3.7%, dragging its market capitalisation to roughly $4.8 trillion. A 0.4% advance in Apple stock simultaneously lifted the iPhone manufacturer’s valuation to approximately $4.9 trillion.
The shift in market leadership underscores a significant rotation within the technology sector, with investors actively pulling capital away from businesses tied to artificial intelligence infrastructure. Pressure on Nvidia specifically intensified following reports that Chinese startup Moonshot had built an AI model capable of rivaling leading systems from OpenAI and Anthropic. Because those Western models rely extensively on Nvidia’s hardware, Moonshot’s emergence has stoked investor fears that the massive capital expenditure cycle powering the semiconductor industry may be nearing its peak.
The selloff extended well beyond a single stock, reflecting a broad reassessment of chip valuations. The Philadelphia Semiconductor Index (SOX) plunged 4.8% on Friday, pushing its decline from a late-June peak past the 20% threshold to officially enter bear market territory. Renewed geopolitical tensions in the Middle East compounded the selling pressure, putting the semiconductor sector on course for its worst weekly drop since the tariff-driven market turmoil of April 2025.
Apple provided a stark contrast, acting as a primary beneficiary of this capital rotation. The company's momentum was reinforced by an HSBC upgrade to "Buy" from "Hold", with the bank noting that Apple is well-positioned to thrive in the current market environment.
However, the broader semiconductor complex retains a strong underlying performance for the year. The SOX remains up nearly 60% since January, significantly outperforming the broader market's 8.6% gain over the same period. Wall Street analysts are largely holding the line, with consensus price targets for the benchmark's 30 constituent stocks pointing to an average upside of roughly 38% over the next 12 months. This suggests the market views the current correction as a valuation reset rather than a fundamental decline in chip demand.
