Apple became the world's most valuable company on Monday, overtaking Nvidia after the stock market closed. This is the first time since April 2025 that Apple has held the top position by market value. Apple's shares rose about 1% on Monday, helping the company's market value reach $4.95 trillion.Apple overtakes Nvidia as the world's most valuable company after AI chip stocks fall (AFP)Nvidia's shares fell nearly 5% on Monday, reducing the chipmaker's market value to about $4.77 trillion, according to CNBC. The drop in Nvidia's stock allowed Apple to move ahead and become the world's most valuable listed company. Nvidia had held the No. 1 spot since June 2025, when it overtook Microsoft to become the world's most valuable company. Nvidia had also briefly crossed a $5 trillion market valuation in October.Why Nvidia stock fellThe fall in Nvidia shares came as AI chip stocks broadly declined, with investors becoming worried about the high costs of building AI infrastructure. Investors are increasingly concerned about massive AI spending, especially the huge capital investments needed to build AI data centres. Business Insider reported that Nvidia's latest sell-off followed reports that the company is discussing about $250 billion in financing for OpenAI's data centres.That report revived investor fears about circular dealmaking and heavy capital expenditure, making investors more cautious. Nvidia's recent decline is part of a broader weak period for chip stocks. Nvidia stock has fallen about 3% over the past week. So far in 2026, Nvidia shares have gained only about 4%, according to CNBC. By comparison, Apple's stock has climbed around 24% this year.Also read: iOS 26.6 update fixes nearly 90 security flaws: Why iPhone users should update nowApple beats NvidiaApple has clearly outperformed Nvidia since the beginning of June. Apple has beaten the broader market because investors have liked its AI spending strategy. Instead of spending heavily to build its own AI infrastructure, Apple has preferred to rent computing capacity. Investors have rewarded Apple's more cautious approach to AI spending.Nvidia has enjoyed three years of strong AI-driven sales growth. However, many investors are now shifting their focus away from AI graphics processing units (GPUs) and towards other parts of the AI supply chain. Investors are showing more interest in memory chips and other data centre infrastructure companies. CNBC named Micron Technology, SK Hynix and Sandisk as companies benefiting from this shift in investor interest.Apple earnings aheadEarlier this month, another wave of selling hit chip stocks after a Chinese AI startup launched a new AI model. Some investors feared the launch could become another "DeepSeek moment". Business Insider said Nvidia's gains this year have also lagged the broader S&P 500 index. The S&P 500 has risen about 8% this year, while Nvidia has gained only around 5%.Apple is scheduled to report its fiscal third-quarter earnings on Thursday. Investors are closely watching Apple's earnings report, according to CNBC. Apple is expected to reveal for the first time how the global AI-driven memory chip shortage has affected its business financially. The AI-related memory chip shortage forced Apple to increase prices for some Mac and iPad models in June.AI market changesApple's recent rise is notable because the company had faced criticism in recent years for not moving aggressively into AI. As investor sentiment changes, Apple may now be benefiting from a move towards less crowded, consumer-focused stocks.The broader technology sector has remained volatile in 2026, especially semiconductor companies. Business Insider reported that the iShares Semiconductor ETF has fallen 14% over the past month, while the Roundhill Memory ETF has dropped 29% during the same period.