Apple's market cap surges $650B in two months as semiconductor stocks slump

As skepticism grows over AI investment returns, large-cap technology stocks tied to semiconductors and cloud computing have struggled — while Apple has been recast as a premier safe-haven asset, adding roughly $650 billion to its market capitalization over the past two months.

Apple closed at $317.31 on Monday (local time), setting a new all-time closing high, according to Bloomberg. The stock has rebounded about 16% from its June 25 low of $275.15, pushing its market capitalization to $4.66 trillion.

Semiconductor stocks moved in the opposite direction over the same period. The Philadelphia Semiconductor Index fell 10%, while the S&P 500 gained just 3% and the Nasdaq 100 edged up 0.3%. For the year to date, Apple's share price is up 17% — the highest gain among the so-called Magnificent Seven.

Market observers say investor funds have rotated into Apple, whose earnings are seen as relatively stable, as concerns mount over the profitability of AI infrastructure spending.

"Amid worries about the profitability of AI infrastructure investment, investors have come back to the stability of Apple," said Mark Bronzo, chief investment strategist at Lai Strategic Partners.

Apple had long been seen as falling behind in the AI race, partly due to delays in developing a new version of Siri. But analysts say its comparatively modest AI spending burden has recently emerged as a competitive advantage.

Apple is not entirely insulated from headwinds, however. The company announced price increases for its Mac, iPad and home device lineups on June 25, and its shares posted their steepest single-day drop since April 2025 immediately after the announcement — a sign that surging memory chip prices are weighing on costs.

To ease cost pressures, Apple has reportedly asked the US government for permission to purchase chips from two Chinese semiconductor companies on the Ministry of National Defense's blacklist for use in devices sold in China.

In an investor note on July 7, JPMorgan analyst Samik Chatterjee said Apple had raised prices in the past while continuing to grow unit sales, suggesting the impact of the latest increases on demand would be limited.

Investors are also eyeing a foldable iPhone, expected to be unveiled in September, as a new growth driver. Apple has reportedly told suppliers to prepare for a production target of about 10 million units this year, up from an earlier goal of 7 million to 8 million.

Markets expect Apple's earnings momentum to continue. Sales for fiscal year 2026 (October 2025–September 2026) are forecast to grow about 15% and net profit about 17%, which would mark the company's fastest growth since 2021. Free cash flow is projected to reach a record $140 billion, up more than 40% from the prior year.

Some caution that much of the optimism is already priced in, however. Apple's 12-month forward price-to-earnings ratio stands at 34 times — the highest among the Magnificent Seven excluding Tesla — and only 61% of analysts carry a buy rating on the stock, well below the roughly 90% buy ratios for Microsoft, Amazon, Meta and Nvidia.

A new investment calculus is taking hold in markets: rather than the scale of AI spending, what matters now is how much profit that spending actually generates. In that environment, Apple's strong cash generation and earnings stability have made it a short-term refuge — but the company still faces the challenge of proving it can sustain new growth drivers that justify its elevated valuation.