Key Points

After a stretch of decline last year, Apple has surged ahead with strong momentum.
iPhone sales keep climbing and are capturing more ground in China.
The firm recently gained clearance to launch Apple Intelligence in China, which may draw additional customers to its ecosystem.

Apple carries a notable record with market capitalization leadership. In August 2018 the iPhone maker became the first U.S. listed company to reach one trillion dollars in value. It built on that by becoming the first to hit two trillion and three trillion dollars in August 2020 and January 2022. The arrival of the artificial intelligence wave then drove Nvidia shares higher, allowing it to reach four trillion dollars in July 2025 and five trillion dollars in October 2025.

Apple struggled through much of the prior year amid tariff concerns and ongoing inflation that dampened investor views. Even so iPhone sales, the core of its operations, kept rising steadily. This helped Apple advance twenty percent so far in 2026, outpacing the ten percent gain of the S and P 500.

I expect the iPhone maker will soon pass Nvidia and reclaim the position as the globe's most valuable company. Here is the reasoning.

The AI Factor

Widespread use of AI has increased pressure on flash memory and storage chips. Strong demand for dynamic random access memory and NAND flash memory has exceeded supply, lifting prices sharply. The effect has extended past AI into the smartphone sector.

China faces the pressure as smartphone shipments dropped four point three percent year over year for the fifth straight quarter of declines per a report from market intelligence firm IDC. The report stated that higher memory and component costs led most Android vendors to increase prices which reduced upgrade interest.

Buyers in China facing higher costs for lower priced smartphones chose to move up to iPhones instead. Sales rose twenty four percent year over year, the top rate among vendors in China and one of only two to show growth.

Chinese regulators cleared Apple Intelligence for use on iPhones in the country this week after a two year approval process. The company partnered with Alibaba and Baidu to meet the local collaboration rule. This step may bring more users to the Apple platform.

A Strong Approach

The firm has long leveraged its supply chain strengths against rivals and this case follows the pattern. It has held off on raising iPhone prices despite increased costs and thereby taken share from competitors forced to increase their prices.

China has typically represented eighteen percent of Apple revenue. By postponing price hikes Apple is gaining share which builds a bigger base for services apps and accessories. iPhone owners also tend to add other Apple devices creating further gains for the company.

Investor caution remains around Nvidia amid ongoing worries. Any hint of slowing AI uptake could hurt the chipmaker even with its strong results. As an Nvidia holder I intend to keep the position given the positive long term outlook.

Still robust China sales and the start of Apple Intelligence appear set to help the iPhone maker surpass Nvidia market value and take back the lead.

Should You Purchase Apple Shares Now

Before buying Apple shares note this point.

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Recall that when Netflix appeared on the list in December 2004 an investment of one thousand dollars would now be worth three hundred ninety six thousand five hundred forty two dollars. When Nvidia joined the list in April 2005 the same one thousand dollar investment would now equal one million two hundred ninety nine thousand nine hundred sixty one dollars.

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Danny Vena CPA holds positions in Apple Baidu and Nvidia. The Motley Fool holds positions in and recommends Apple Baidu and Nvidia. The Motley Fool recommends Alibaba Group. The Motley Fool maintains a disclosure policy.

The opinions stated here belong to the author and may not reflect those of Nasdaq Inc.