Apple briefly became the second public company ever to reach a $5 trillion market capitalization on July 28, joining Nvidia in that exclusive club. The stock hit an intraday high of $342.89 before pulling back. The milestone came just hours before the company is scheduled to report its third-quarter earnings — and Tim Cook's final earnings call as CEO.
A $5 Trillion Milestone
Apple's stock has climbed about 25% year-to-date, far outpacing Nvidia's 6% gain over the same period. The rally has been driven by strong iPhone sales, not by heavy spending on artificial intelligence. Unlike rivals who are pouring billions into AI infrastructure, Apple has taken a more cautious approach. The company lacks an in-house large language model and relies on Google's cloud technology for a revamped Siri expected this fall.
Earnings and CEO Transition
Thursday's earnings call will be Tim Cook's last as CEO. John Ternus is set to take over on September 1. The transition comes at a pivotal time for Apple, as it navigates questions about its AI strategy and faces rising costs for components. The company recently raised prices on MacBooks and iPads, citing higher memory and storage costs.
Apple's AI Strategy
Apple has not been a leader in the AI race. While competitors like Microsoft and Google have invested heavily in large language models and cloud AI, Apple has kept its spending disciplined. The revamped Siri, expected this fall, will rely on Google's cloud technology rather than an Apple-built model. That approach has drawn some skepticism from investors, but Apple's stock performance suggests the market is still betting on the company's ability to deliver.
iPhone Sales and a New Leasing Program
Strong iPhone sales have been the main driver of Apple's market cap growth. To keep that momentum going, Apple launched a new leasing program called 'Upgrade' in partnership with Klarna. US customers can now pay $17.99 per month for an iPhone, making the devices more accessible without a traditional carrier contract.
Price Hikes on MacBooks and iPads
Not everything is getting cheaper. Apple raised prices on MacBooks and iPads due to rising memory and storage costs. The increases come as the company tries to maintain margins in a challenging supply chain environment. It's unclear how customers will react, especially with the new leasing program offering a lower upfront cost for iPhones but not for other products.
With John Ternus set to take the helm in just over a month, the big question is whether he'll stick with Cook's cautious AI strategy or push for more aggressive investment. Thursday's earnings call may offer some clues — but it's Cook, not Ternus, who will be answering the questions.
