Apple crowned as world's largest firm after knocking Nvidia off the top spot

Apple reclaimed its crown as the world’s largest company from Nvidia yesterday as a rout in stocks linked to the AI boom continued. 

While an index of major semiconductor companies was in free-fall, shares in iPhone-maker Apple edged up to a record high of $337 in early trading in New York.

That valued the company at $4.9trillion. Shares in chipmaker Nvidia fell nearly 5 per cent to below $200 each, giving it a value of $4.8trillion. 

The two companies continued to trade places as the day wore on and Nvidia clawed back some of its losses. 

The moves came as investors reassess the outlook for AI following a blistering run in shares of the world’s leading semiconductor firms. 

Nvidia became the world’s largest company in May last year as investors piled into companies at the forefront of the AI revolution, including chipmakers. 

In October, Nvidia became the first business on the planet to be valued at $5trillion. But after the wild gains of recent years, investors are fretting the rally may be overdone and are moving money away from chip stocks and other big spenders on AI. 

Nvidia suffered another setback yesterday after a new Chinese AI model emerged as a major threat to offerings from OpenAI and Anthropic, which use Nvidia chips. 

The Philadelphia Semiconductor Index, which tracks 30 major chip companies including ASML, Intel, Arm and Nvidia, fell almost 6 per cent yesterday. 

That took losses since its June peak to 20 per cent – putting the index in a ‘bear market’ – after it more than doubled in value over the previous three months. South Korea’s main Kospi benchmark – which includes tech giants Samsung Electronics and SK Hynix – is down 25 per cent in less than a month after more than doubling since the start of the year. 

Analysts said the recent losses have upended so-called ‘momentum’ trading strategies in which investors plough into the best-performing stocks in the hope they will keep rising. 

‘We’re dealing with one of the biggest momentum sell-offs on record,’ said Christian Mueller-Glissmann, of Goldman Sachs. 

‘It’s been three weeks of washout.’ With disappointing results from Netflix further souring sentiment, the tech-heavy Nasdaq fell nearly 3 per cent in early trading following a 4 per cent slide on Japan’s Nikkei overnight. The FTSE100 fared better in London, however, inching up 0.3 per cent.