Defying the Market Downturn! Apple Joins the $5 Trillion Club

In the ongoing AI arms race, Apple has deliberately maintained restraint, yet has become the first to reach a $5 trillion market cap summit.

On Wednesday, Apple’s closing market value officially surpassed $5 trillion, making it the second publicly traded company in the world to cross this threshold, only after the chip giant Nvidia. According to Dow Jones market data, Apple's market value at close was $5.005 trillion, with the share price hitting a record high.

Notably, this breakthrough occurred against the backdrop of overall pressure on the US stock market—on that day, the S&P 500 index fell by 1.1%, the Nasdaq 100 index dropped 2%, the semiconductor index declined for a sixth straight session, and tech giants like Nvidia and Meta both fell by more than 3%.

Previously, during July, Apple touched the $5 trillion threshold intraday six times but failed to maintain it at close until this Wednesday's decisive breakthrough. This milestone also coincided with the end of Tim Cook’s era and the appointment of the new CEO, John Ternus.

Cook’s Legacy

Cook officially stepped down on August 31 this year, after leading Apple for 15 years.

During his tenure, Apple’s market cap increased 13-fold. Annual iPhone sales nearly quadrupled. Annual revenue from services grew from $10 billion to over $100 billion. The combined annual revenue from the Apple Watch and AirPods product lines exceeded $30 billion. Meanwhile, Apple cumulatively repurchased shares and paid out more than $1 trillion in dividends.

Analysts point out that the key reason Apple stock is traded at a valuation premium to the overall S&P 500—even though its revenue growth lags behind the index average—is because the market views it as a highly certain defensive asset.

The core logic of the Cook model lies in strict control of capital expenditures. While technology giants such as Microsoft, Google, and Meta have been racing to invest astronomical sums in data center construction amid the AI boom, Apple has remained focused on hardware devices and high-margin services—a strategy that has grown even more valuable in the AI era.

The Market Endorses Apple’s Price Hike Strategy

Apple currently faces a real challenge: the surge in data center demand for memory and storage chips has led to supply shortages, dramatically increasing the costs of chips used in iPhones, Macs, and iPads.

Apple’s response is to raise prices across the board, including older iPhone models that typically see price cuts.

In theory, this move carries risk—consumers might delay upgrading their devices. However, since the initial round of price increases, Apple’s share price has gained 25%.

Bank of America analyst Wamsi Mohan explained: “Investors believe Apple users will accept higher prices, and even if margins slip, Apple’s overall profits can remain stable or even grow.” He also added that the forthcoming foldable iPhone Duo is expected to be well received by the market, and the new Siri AI will further drive device upgrades among users.

AI: The Unresolved Achilles’ Heel

AI has long been considered Apple’s weak spot by outsiders.

Apple’s attempts to develop its own cutting-edge large models ended in failure, and Siri fell far behind after the launch of ChatGPT. According to The Wall Street Journal, Apple this autumn released a revamped Siri developed with Google’s technology, but it still lags behind competitors on several key indicators.

Apple’s advantage is that the new Siri is embedded directly in billions of iPhones used daily, and Apple possesses large volumes of personal data, which in theory could be used to build more appealing AI features.

However, threats are closing in. OpenAI is preparing a series of AI-powered hardware products and has already poached hundreds of employees from Apple. In July this year, Apple filed a lawsuit against OpenAI for allegedly stealing trade secrets. OpenAI responded, stating “there is no evidence that this lawsuit has any substantive basis,” and in a new legal filing on Wednesday countered that Apple had previously poached one of its employees, who had taken confidential files upon departure. Apple, for its part, said it has not found evidence to support these new allegations.

The Wall Street Journal points out that AI will be the main battlefield where Ternus proves his value—he will either usher in a new era of innovation and growth for Apple, or watch as the company that defined human-computer interaction loses its iconic position.

A $5 trillion market cap is the starting point Cook has handed to Ternus, as well as the benchmark he must maintain and surpass.