CUPERTINO, California: Apple reclaimed the title of the world's most valuable company on Friday, overtaking Nvidia as investors broadened their bets beyond the biggest beneficiaries of the artificial intelligence boom.

Apple was valued at US$4.88 trillion, while Nvidia's market capitalization fell to about $4.86 trillion after its shares dropped 3.5 percent. Apple last held the top spot in April last year.

The shift reflects changing investor sentiment as markets increasingly focus on companies seen as capable of monetizing AI through products and services rather than solely through chip sales.

"Apple was seen as a laggard in the AI race because it wasn't spending to develop models, but now sentiment has changed," said Toni Meadows, head of investment at BRI Wealth Management.

"Apple is less exposed to capex intensity and better positioned to monetize AI via services, ecosystem lock-in, and hardware upgrades. The re-rating reflects confidence in earnings durability rather than speculative AI upside."

The milestone comes as Apple works to strengthen its AI strategy. In June, the company rolled out a long-delayed overhaul of Siri, aiming to narrow the gap with rivals in generative AI. Analysts have also pointed to the vast amount of personal data stored on iPhones as a potential advantage in making Siri more useful, although privacy protections remain a challenge.

The development also comes ahead of a leadership transition, with Chief Executive Tim Cook preparing to hand over the role to hardware chief John Ternus in September.

Nvidia, meanwhile, remains a major beneficiary of AI spending, with its graphics processors powering many generative AI systems. The chipmaker became the first company to surpass a $5 trillion market valuation in October and could regain the top position if investor sentiment shifts.

"I don't see any meaningful distinction. Nvidia is likely to be a significant participant in whatever happens going forward," said Benjamin Hall, vice president of alpha research at Segal Marco Advisors.

Investor enthusiasm has also spread beyond AI processors to memory chipmakers. Micron crossed the $1 trillion market value mark in May, while South Korea's SK Hynix, which listed on Nasdaq earlier this month, has emerged as another major AI-focused investment.

"The new entrants to the market could spread out the focus away from the pure Magnificent Seven names into a wider number of names," Hall said.

The broader semiconductor rally has cooled in July as investors reassessed the sustainability of AI-related spending, leaving the Philadelphia Semiconductor Index nearly 19 percent below its record high. Even so, the index has outperformed Nvidia's stock so far this year.