The simultaneous crossing underscores the tech sector’s extraordinary dominance, with artificial intelligence serving as the primary catalyst, while revealing fundamentally different growth trajectories between Apple’s hardware-driven ecosystem and Microsoft’s AI-powered cloud empire.
The Race to $4 Trillion
Apple’s stock rose about 1% Tuesday to push its valuation past four trillion, completing a journey from $1 trillion in August 2018, to $2 trillion in August 2020, and $3 trillion in January 2022. This recent ascent represents a remarkable turnaround from earlier this year when the company lost over $310 billion in market value in one trading day in April as it navigated challenges from President Trump’s tariffs to AI product delays.
Microsoft crossed the threshold in July and hit it again Tuesday after reaching a deal with OpenAI that would allow the ChatGPT maker to restructure as a public benefit corporation, with Microsoft holding a $135 billion stake or 27% in OpenAI Group. The OpenAI partnership grants Microsoft access to the AI startup’s technology until 2032, including models that achieve artificial general intelligence.
Nvidia remains the world’s most valuable company with a market capitalization exceeding $4.6 trillion, having become the first company to reach $4 trillion in July 2025. Alphabet sits in fourth place at approximately $3.15 trillion.
Apple Rises with iPhone 17
Apple’s ascent has been powered primarily by exceptional demand for its iPhone 17 lineup, which launched in September 2025. Counterpoint Research reported that the iPhone 17 series outsold the iPhone 16 by 14% in the first 10 days of availability in the US and China.
The base model iPhone 17, at the same cost as last year’s model, includes a better chip, screen, storage, and selfie lens. The iPhone 17 Pro and Pro Max feature Apple’s A19 Bionic chip, enhanced cameras, and improved zoom capabilities.
The strong performance in China represents a critical turnaround for Apple, which has faced mounting pressure from local competitors like Huawei. Chinese pre-orders for the iPhone 17 broke records on JD.com, with the first minute surpassing the first-day pre-order volume of the iPhone 16 series.
Industry analyst Ming-chi Kuo reported that iPhone 17 pre-order sales in the first weekend were significantly higher than the iPhone 16 series, demonstrating that premium device demand remains robust despite concerns about upgrade fatigue.
Wall Street analysts have responded enthusiastically. Loop Capital upgraded Apple from Hold to Buy, raising their price target from $226 to $315, while Wedbush set expectations at $310. Several other firms have raised their price targets, citing the strength of the upgrade cycle and Apple’s massive installed base of over 300 million devices that haven’t been upgraded in recent years.
Microsoft’s AI-Powered Transformation
Microsoft’s return to $4 trillion reflects its strategic transformation into an AI-first enterprise powerhouse. The company’s partnership with OpenAI has positioned it as the infrastructure backbone for the generative AI revolution, with Azure cloud services providing compute power for training AI models and the platform for deploying them at scale.
Microsoft’s fiscal 2025 revenue rose 15% year over year, with Azure revenue growing 33% (35% in constant currency) according to its latest quarterly report, with AI services contributing 16 percentage points to growth. The Azure platform continues gaining market share, with AI-powered products like GitHub Copilot and Microsoft 365 Copilot driving substantial revenue growth.
OpenAI has contracted to purchase $250 billion in Microsoft Azure cloud services, cementing the financial interdependence between the companies. Microsoft also integrated xAI’s Grok models into Azure AI Foundry, demonstrating its strategy to become the preferred platform for enterprise AI deployment.
Investment banks remain bullish on Microsoft’s trajectory, with UBS maintaining a $650 price target and citing strong enterprise demand. Microsoft is scheduled to report quarterly earnings on Wednesday, October 29.
The AI Divide
Unlike Nvidia and Microsoft, which crossed $4 trillion on AI strength, Apple lags in the technology. While Google and Samsung offer mature AI assistants, Apple’s AI-powered Siri remains in development with key features delayed until 2026, and the company is losing senior AI executives to Meta.
Yet Apple proves hardware excellence and ecosystem integration can command premium valuations without AI leadership. The iPhone accounts for over half of Apple’s profit, and its user base of over 1 billion iPhones plus devices like the Apple Watch ensure customers keep returning, according to Chris Zaccarelli of Northlight Asset Management.
Mohammed Soliman of McLarty Associates noted the market recognizes two distinct but equally valid AI strategies: Microsoft betting on platform ubiquity through OpenAI, while Apple will leverage on-device AI for privacy advantages. Microsoft’s strategy embeds AI across its product stack from Windows to Office 365 to Azure, while also having returned $364 billion to shareholders through dividends and buybacks over the past decade.
What’s Next
The top five tech companies (Apple, Microsoft, Alphabet, Amazon and Nvidia) now account for nearly 30% of the S&P 500’s total market value, a concentration level unseen since the dotcom boom. More than 40% of S&P 500 gains this year have come via these giants, but with that concentration comes fragility, according to Kate Leaman of AvaTrade. John Mullen of Parsons Capital Management noted this creates systemic risk, where index funds and retirement portfolios become increasingly dependent on a handful of technology companies.
Both companies face distinct challenges. Apple shares trade at 33.2 times projected earnings versus 27.42 for Nasdaq 100, while Microsoft’s heavy AI infrastructure spending pressures profit margins. The OpenAI partnership’s sustainability through potential AGI achievement introduces additional uncertainty.
Both report quarterly earnings this week, Microsoft Wednesday and Apple on Thursday, October 30, providing crucial insights into whether $4 trillion valuations can be sustained. Executive commentary will critically frame how confidently the market can chase the AI story into 2026.
The achievement reflects investor conviction that the AI revolution will create enormous value, that premium hardware ecosystems remain viable, and that dominant tech platforms can sustain extraordinary valuations through demonstrated execution. Whether this proves justified will become clearer in the quarters ahead.
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