Apple is closing in on Nvidia as it looks to reclaim title of largest U.S. company

By Christine Ji and Emily Bary

Once the face of the AI trade, Nvidia's valuation has compressed to levels not seen since 2013 while Apple shares continue to power higher

Shares of Apple have risen 15% year to date.

After reigning as the largest U.S. company by market cap for over a year, Nvidia now risks losing that title to Apple.

Apple (AAPL) is worth about $200 billion less than Nvidia, according to Dow Jones Market Data. The narrowing of the market-capitalization gap between those two companies reflects how Nvidia (NVDA) has lost some luster on Wall Street, all while Apple has proved relatively resilient despite concerns about its artificial-intelligence strategy and component cost pressures.

Much of 2026 has been defined by "investors looking for AI plays beyond Nvidia," Mike Reynolds, vice president of investment strategy at Glenmede, told MarketWatch. "When you become the biggest stock in the world, there's a target on your back from people trying to chip away at your moat, and I think that's part of what we're seeing."

Reynolds believes AI hardware could increasingly become more specialized for different use cases. Big Tech companies like Alphabet (GOOGL) (GOOG) and Amazon.com (AMZN) are developing their own chips, and on Monday Apple struck a deal with Broadcom (AVGO) for custom silicon components.

Nvidia was worth as much as $1.37 trillion more than Apple on Aug. 4, 2025. That was the widest valuation gap between the two since Apple lost its crown as the nation's largest company on May 2, 2025, according to Dow Jones Market Data.

Nvidia's stock is trading near a historic discount at just 15.63x two-year forward earnings, according to Dow Jones Market Data. The stock has dipped below the 15.5x threshold a handful of times in 2026, a valuation compression that hasn't been seen since 2013.

Nvidia began its sustained run as the most valuable company in the U.S. on June 25, 2025, at which point it took over from Microsoft (MSFT).

Apple has a market capitalization of $4.56 trillion, versus $4.78 trillion for Nvidia and $4.43 trillion for Alphabet. Microsoft sits well below that grouping. Its market cap just south of $3 trillion signifies the doubts investors have shown about the company's AI positioning and whether all its spending will pay off.

On the other hand, Apple has been relatively conservative with its AI spending compared to the hyperscalers. The company has chosen to outsource a portion of its AI capabilities through a partnership with Google Gemini. The stock's relative outperformance this year highlights an "inverse relationship between the supply and demand side of the AI trade," according to Reynolds. Investors are beginning to pay more attention to the companies integrating AI capabilities into their existing products to improve the user experience.

Shares of Alphabet (up 18%) and Apple (up 15%) have outperformed the rest of the so-called "Magnificent Seven" group of megacap tech stocks so far this year, and they're the only two from that group whose gains have exceeded those of the S&P 500 SPX over the year to date. Nvidia's stock is in positive territory for the year but up just 6%, versus 9% for the broad-market index.

-Christine Ji -Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

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