Apple Inc. (NASDAQ:AAPL) and NVIDIA Corporation (NASDAQ:NVDA) have traded the title of world’s most valuable company more than once in the past two weeks. Apple first edged ahead on Friday, July 17, at $4.88 trillion versus Nvidia’s roughly $4.86 trillion after Nvidia shares fell 3.5%. Nvidia returned to the top spot, then lost it again Monday, July 27, when a 5% drop pulled its value to about $4.77 trillion, below Apple’s $4.95 trillion. Apple briefly touched $5 trillion Tuesday, July 28, a milestone Nvidia had reached first, back in October. Apple’s stock then fell two straight days and dropped 7% to 8% in extended trading Thursday after fiscal third-quarter earnings that beat estimates.
Why the Beat Didn’t Lift the Stock
Apple Inc. (NASDAQ:AAPL)’s numbers were strong. Revenue rose 16.4% to $109.42 billion, above estimates and Apple’s own guidance, led by iPhone sales up 21.7% to $54.25 billion, Apple’s best-ever fiscal third quarter, and Mac sales up 28.7%. CEO Tim Cook, on his last call before John Ternus takes over in September, said Apple was seeing “an incredibly strong product cycle beyond our expectations.” Investors sold anyway: guidance for the current quarter came in soft, with revenue growth of just 9% to 11%, below the 12% Wall Street wanted, and gross margin guided down to 47% to 48% from this quarter’s 50.1%. Cook blamed rising memory costs and a chipmaking capacity shortage, calling the memory crunch a “hundred-year flood.”
This makes you wonder: is the market right to punish Apple over one soft guide, or is it overreacting to supply problems Cook says Apple can manage, while NVIDIA Corporation (NASDAQ:NVDA) rides the very AI boom straining that same supply chain?
Apple’s Bull and Bear Case
Apple Inc. (NASDAQ:AAPL) is deliberately spending less than its peers, expecting just over $11 billion in capex this year, compared with more than $100 billion each for several hyperscaler rivals. Baird analysts wrote that “investors are coming around to Apple’s industry-leading” cash generation and recommended buying the stock. Apple still has an AI angle: a redesigned Siri built with Google arrives with new iPhone hardware in September, across an installed base of 1.5 billion iPhones, and Wedbush’s Dan Ives estimates AI features could eventually add $15 billion a year to a services business that already made $109 billion in 2025. Goldman Sachs analysts noted Apple also gained share in China, adding four points as rivals raised prices and the firm held the line.
However, Apple ended its longtime goal of returning all its cash to shareholders, a sign it may need more capital soon, and analysts already expect iPhone price hikes around the September launch. Services revenue and iPad sales both missed estimates, and Cook said memory costs will keep rising with little flexibility in the supply chain to fix that soon.
Nvidia’s Bull and Bear Case
NVIDIA Corporation (NASDAQ:NVDA)’s position is still the strongest in the industry. It controls roughly 86% of the AI data center GPU market, well ahead of Intel and AMD, and tech giants are expected to spend about $750 billion on AI this year, a figure that could grow again next year. Nvidia’s own sales are still growing fast, in their third year of massive AI-driven growth, and it was the first company ever to cross both $4 trillion and $5 trillion in value.
Nonetheless, Nvidia’s slide this month came with company-specific baggage: reports that it may back roughly $250 billion in financing for an OpenAI data center project, raising questions about how much of its business now depends on its own customers’ ability to pay, plus fresh competition from Chinese chipmakers.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows Nvidia had 275 hedge fund holders as of Q1 2026, well ahead of Apple Inc. (NASDAQ:AAPL)’s 170. Nvidia’s holder count grew from 264 the quarter before, while the dollar value held slipped from $89.1 billion to $83.9 billion. Apple’s holder count barely moved, up from 169.
Both trail some Magnificent Seven peers: Microsoft had 282 holders, Amazon had 353, and Alphabet had 265. Nvidia sits mid-pack among mega-cap tech stocks by hedge fund popularity, while Apple is the least popular of the group.
Conclusion
Apple Inc. (NASDAQ:AAPL)’s beat-but-drop and Nvidia’s own selloff show the same market punishing both companies for opposite reasons, i.e., Nvidia for spending too aggressively on AI and Apple for perhaps not spending enough to keep pace. Neither swing changes what actually decides long-term value: Nvidia’s sales growth and financing risk, and Apple’s steadier earnings now facing real supply and guidance problems of its own. Overall, hedge funds clearly think NVIDIA Corporation (NASDAQ:NVDA) is a better stock to buy than Apple.
While we acknowledge the risk and potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAPL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
