Milestone reflects AI optimism, or iPhone concerns, or something else entirely
Google parent Alphabet closed Wednesday with a market capitalization exceeding Apple’s for the first time since 2019, a development investors described as significant, historic, and definitely caused by something.
“This proves investors are bullish on AI,” said one analyst.
“This proves investors are concerned about Apple’s AI strategy,” said another analyst, describing the same event.
Alphabet overtakes Apple with a market cap of approximately $3.85 trillion, compared to Apple’s $3.84 trillion. The $10 billion difference, representing roughly 0.26% of either company’s value, was described as “a clear signal” by market watchers who specialize in signals.
What It Means, Explained By Those Paid To Explain
The shift reflects growing optimism about Alphabet’s Gemini 3 AI model and increased demand for its Tensor Processing Units, according to analysts. It also reflects concern about Apple’s “less head-on approach” to artificial intelligence, according to the same analysts, using different words.
“Investors have criticized Apple for taking a less head-on approach in the AI race,” noted market observers, who added that investors had previously praised Apple for taking a measured approach in the AI race.
Apple shares fell 0.8% Wednesday. Alphabet rose 2.4%. Together, these movements created a narrative that analysts said was inevitable in retrospect.
Markets React To Markets Having Reacted
The broader S&P 500 hit a record high during Wednesday’s session before pulling back, a pattern analysts attributed to “profit-taking,” “investor caution,” and “the normal functioning of a market where prices go up and down.”
Wall Street forecasters noted that every Bloomberg-tracked analyst predicts stocks will rally for a fourth consecutive year, a prediction based on the fact that stocks have rallied for three consecutive years, which itself was not predicted by every analyst.
“Geopolitical headlines tend to be market moving in very short periods of time,” said Anne Walsh of Guggenheim Partners, “but then the markets go back to watching things that are more drivers of price action.”
When asked what drives price action, she mentioned “profits, margins, valuation, and other metrics”—which is to say, numbers.
Markets will open again Thursday, at which point analysts will explain what happened on Thursday.
Developing.
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