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  • Apple has once again become the world’s largest company by market capitalization.
  • The rally has been going on for several months, and the valuation appears stretched ahead of Thursday’s Q2 earnings report.
  • Discover other megacaps with more attractive valuation profiles.

Apple (NASDAQ:AAPL) shares climbed 1.17% on Monday to a record closing high, allowing the company to reclaim the title of the world’s most valuable listed company from Nvidia. The stock also touched an intraday record of $339.57, lifting Apple’s market capitalization to roughly $4.95 trillion, ahead of Nvidia’s approximately $4.83 trillion after its shares fell 4.99%.

The latest rally extends Apple’s strong recent momentum. The stock has gained 18.7% over the past month and more than 24% over the past three months, reflecting renewed investor confidence.

Much of Apple’s recent rally reflects a shift in investor sentiment toward its artificial intelligence strategy. Unlike many of its Big Tech peers, Apple has reduced capital spending over the past three quarters instead of ramping it up. What was once viewed as a sign the company was falling behind in AI is now being interpreted as evidence of capital discipline and a stronger focus on returns.

The move also coincides with a broader market rotation. Investors have begun shifting away from AI chipmakers toward companies tied to memory and data centre infrastructure, which many see as the next beneficiaries of the AI investment cycle.

Even so, investors may want to be cautious at current levels.

Apple’s valuation has become increasingly demanding. InvestingPro’s Fair Value estimate, which combines several established valuation models, stands at $268.91—around 20% below the current share price. Wall Street remains broadly positive on the stock, but the average analyst price target of $319.02 is also below the current market price, suggesting much of the near-term optimism is already reflected in the valuation.

Adding to the uncertainty, Apple is due to report fiscal third-quarter results on Thursday, July 30. With expectations running high after the stock’s sharp rally, the earnings release could prove a key test of whether the company’s fundamentals can justify its recent gains.

These other US megacaps offer more favorable valuations

For investors interested in large-cap U.S. tech stocks but wishing to avoid an entry point as stretched as Apple’s is currently, we turned to the Investing.com screener, searching for stocks that meet the following criteria:

  • Market capitalization greater than $200 billion (megacaps)
  • Upside potential of more than 15% based on InvestingPro Fair Value
  • Upside potential of more than 15% based on the average analyst price target
  • Piotroski score of at least 5
  • Are you an InvestingPro subscriber with a Pro+ plan? Click here to access this saved research on the screener
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Specifically, these stocks show upside potential ranging from +16.3% to +31.3% based on Fair Value and from +16.5% to +98.2% based on analyst consensus.

  • Amazon remains the dominant force in e-commerce, but its valuation is increasingly driven by the rapid expansion of AWS. The stock has gained about 18% this year, yet many analysts believe it has further room to run as AI demand continues to accelerate. In the first quarter, AWS revenue grew 28% year over year—its fastest pace in nearly four years—while adjusted EPS of $2.78 comfortably beat expectations of $1.63. With second-quarter results due on July 30, Amazon faces an important near-term catalyst. Analyst price targets imply roughly 20% upside on average, with the most bullish forecasts pointing to gains of nearly 37%.

  • Broadcom is emerging as one of the biggest beneficiaries of the AI infrastructure boom. Its custom AI chips and networking products are seeing exceptional demand, with AI-related revenue jumping 143% year over year to $10.8 billion in fiscal second-quarter results. Management expects that momentum to continue, forecasting another quarter of roughly 200% AI revenue growth. The company also recently secured a long-term agreement with Samsung to support production of advanced chips. Although the shares pulled back after earnings because management left its 2027 AI revenue target unchanged, many analysts view the decline as a buying opportunity, with the most optimistic price targets implying upside of as much as 38%.

However, many other stocks on this list offer more attractive profiles, particularly in terms of valuation based on models.

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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of any assets and does not constitute an offer, solicitation, recommendation, or advice to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky; therefore, any investment decision and the associated risk are the sole responsibility of the investor. Additionally, we do not provide any investment advisory services.

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