The PHLX Semiconductor Index closed in a bear market on Friday, finishing more than 20% below its June peak. Apple (NASDAQ: AAPL) spent the same session touching a record intraday high of $334.98 — and passing Nvidia for a moment to reclaim its title as the world’s most valuable company, at about $4.9 trillion.
The divergence isn’t random. Global chip stocks have erased about $3.3 trillion in market value since June 22 as investors rethink what the AI (artificial intelligence) build-out costs and who actually profits from it. Memory chipmakers, among the build-out’s biggest recent winners, have been leading the declines.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Apple, however, is the one technology giant that never signed up to pay for the build-out in the first place.
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Apple spent just $12.7 billion on capital expenditures in fiscal 2025 while generating $98.8 billion in free cash flow. Rivals such as Microsoft and Amazon have committed hundreds of billions of dollars to AI infrastructure — spending Apple has simply avoided matching. That leaves the iPhone maker’s profits far less dependent on the AI spending boom continuing.
Apple’s underlying business is performing, too. Apple’s revenue for its fiscal second quarter (the period ended March 28) rose 17% year over year to $111.2 billion, with earnings per share up 22% and iPhone revenue setting a March-quarter record. Shares have gained nearly 59% over the past year, and the stock now sits more than 60% above its 52-week low of $201.50.
So while the market punishes companies whose earnings lean on ever-rising AI capital spending, money is crowding into the megacap whose earnings don’t. On Friday, that rotation was strong enough to push Apple back to the top of the market on the very day the chip index broke down.
The shelter has a price, though. At about $332 per share as of this writing, Apple trades at roughly 40 times earnings, a steep multiple for a company growing revenue 17%. Investors are no longer just paying for iPhone sales and services growth. They’re paying a premium for safety.
That premium could keep expanding if the chip sell-off deepens, and Apple’s light spending model means no wave of depreciation is coming to weigh on future earnings. Of course, a multiple this high leaves little room for disappointment if iPhone momentum cools. Friday’s divergence says more about the chip trade than about Apple — and investors chasing the safety should know they’re buying a great business at a price that arguably already reflects it. With that said, I’m not selling my Apple shares.
