Google-parent Alphabet on Thursday eclipsed Apple to become the world’s second-most valuable company, marking a seismic shift in the technology sector’s hierarchy as the artificial intelligence boom continues to rewrite Wall Street’s leaderboard.
The milestone leaves Alphabet trailing only the chip-making giant Nvidia, which remains the world’s most valuable firm, while relegating long-time market leader Apple to third place.
The reshuffle follows a period of divergent fortunes for the Silicon Valley titans. Alphabet’s shares have surged on the back of robust cloud computing growth and the rapid integration of generative AI into its core search and advertising businesses. Conversely, Apple has faced mounting pressure over cooling iPhone demand in China and perceptions that it has lagged behind its peers in the high-stakes AI race.
’AI-driven momentum’
Market analysts noted that the flip reflects investor confidence in Alphabet’s data-rich ecosystem.
”What we are seeing is a fundamental re-rating of big tech based on AI readiness,” said Daniel Ives, a senior equity analyst. “Alphabet has successfully pivoted from a search-first to an AI-first company, and the market is rewarding that vision with a premium valuation that has finally pushed it past the iPhone maker.”
By midday trading in New York, Alphabet’s market capitalization hovered just above the $3.4 trillion mark, edging out Apple’s $3.35 trillion valuation. Nvidia remains in the top spot with a valuation exceeding $4 trillion, driven by its near-monopoly on the processors that power AI systems.
Diverging paths
The change in ranking underscores the shifting priorities of global investors. For over a decade, Apple was the undisputed king of the markets, fueled by the global ubiquity of the iPhone and a growing services division.
However, recent quarters have seen Alphabet’s Google Cloud division turn a significant profit, while its “Gemini” AI models have begun to show commercial promise.
”Alphabet’s strength in the infrastructure layer of AI gives them a massive advantage,” noted technology consultant Gene Munster. “While Apple is focused on bringing AI to the consumer device, Alphabet is selling the picks and shovels to the entire industry through its cloud platform.”
Apple’s uphill climb
Apple has attempted to claw back momentum with the launch of “Apple Intelligence,” but supply chain issues and a slower-than-expected rollout in international markets have dampened the stock’s performance relative to its rivals.
The Cupertino-based firm also continues to grapple with regulatory headwinds in the European Union and the United States, where antitrust scrutiny has targeted its lucrative App Store practices.
The last time Apple was not one of the two most valuable companies in the world was in early 2019. For Alphabet, the move to the number two spot represents a historic peak, reflecting a rally that has seen its stock price jump more than 40 percent over the past year.
As the trading day drew to a close, the gap between the two companies remained narrow, with analysts warning that volatility could see the positions swap again. However, the symbolic victory for Alphabet highlights a broader trend: in the current market, hardware is being overshadowed by the raw processing power of AI and the data that feeds it.
