Apple Stock Heads for Record as Big Tech Pecking Order Gets Reshuffled

The upper deck of the market’s biggest stocks is changing. (NYSE)

Key Points

• Google’s parent company, Alphabet, has seen its market value approach $4 trillion, with its stock advancing 17% in November.
• Nvidia’s stock has fallen more than 15% from its peak, losing over $720 billion in market value in the past month.
• Meta shares have dropped more than 15% since late October earnings, while Oracle and SoftBank have also seen significant declines.

It may be too early to declare a new sheriff in residence, but Google parent Alphabet emergence as the hottest new thing in artificial intelligence has triggered a massive realignment among the world’s biggest tech stocks.

Google is set to open at a fresh record high on Wednesday, with a market value of just under $4 trillion, to extend its November advance to around 17%.

Apple, meanwhile, is quietly back in record high territory having gained more than 36% since early summer, powered by stronger-than-expected demand for its new suite of iPhones—and possibly its absence from the multibillion race to outspend its big tech rivals.

On the downside, Nvidia stock is set to open more than 15% south of its last all-time peak, as it slowly careens through correction territory heading into the final month of the year.

It’s been an astonishing turn of events for the market’s three largest stocks since the seeds of the current turmoil were sown in late October with a mixed set of third quarter earnings from Meta Platforms.

The Facebook parent saw solid gains around its family of apps, and topped Wall Street’s profit forecast, but also indicated a big increase in capital spending plans for the final months of the year and the whole of 2026.

That triggered a massive market rethink in terms of the billions being committed to AI ambitions, the debt being accrued to fund it, and the lack of clear path to profitability from even the biggest players in the space.

Meta shares have fallen more than 15% since the release of the company’s earnings on Oct. 29, and the stock has only just clawed its way out of bear market territory with this week’s 7% gain.

Meta also lost its place in the ranking of the largest U.S. companies when it was overtaken by chip maker Broadcom late last month.

At the top end of the table, Google and Nvidia have swapped around $1.3 trillion in market value over the past month, with the former gaining $590 billion and establishing new ground in the AI arms race.

The release of its Gemini three chatbot, powered by its in-house TPU processors, and reports that they could be sold to Meta for use on its Llama infrastructure, cemented its case.

Nvidia, which has lost more than $720 billion in market value over the past month, said it’s “delighted by Google’s success” in the AI space, but confident that its own market dominance will continue.

“Nvidia is a generation ahead of the industry [and] the only platform that runs every AI model and does it everywhere computing is done,” the company said in a widely-shared statement.

Stocks outside of the Google/Nvidia axis are also in flux.

Oracle shares have tumbled 25% so far this month, and are pinned near the lowest levels since early June, amid concerns tied to its reliance on OpenAI for a larger portion of its future revenue and the borrowing it will take to build the AI infrastructure needed to secure it.

Japan’s SoftBank, another group with close financial ties to OpenAI, has fallen more than 40% since late October, and earlier this month dumped its entire $5.8 billion stake in Nvidia as part of an effort to raise cash for other AI projects.

Advanced Micro Devices, a distant second to Nvidia in the AI chip race, has fallen 20% since late October, with the decline exaggerated by concerns that Google’s TPU advances will pressure the pricing power of its MI400 processors.

Daniel Skelly, head of Morgan Stanley’s wealth management market research & strategy team, thinks we haven’t seen the last of the current market reshuffle, but argues that quality will ultimately dictate its conclusion.

“If the last few days are any indication, we haven’t seen the last of tech volatility,” he said in comments to Barron’s sent late Tuesday.

“But even if the AI trade isn’t out of the woods, the advantages enjoyed by the biggest players in the AI space—scale and earnings power—remain intact,” he added. “A downturn provides potential opportunities not just in these stocks, but in quality AI adopters in healthcare, financials, and energy.”

In other words, a reshuffling of the deck isn’t a bear market. Far from it.

Write to Martin Baccardax at martin.baccardax@barrons.com