Apple reclaimed the world's largest market cap position from NVIDIA and briefly exceeded $5 trillion during trading on July 29 (Korean time), as US stocks showed mixed performance with the Dow rising 1.03% and the S&P 500 gaining 0.21% while the Nasdaq fell 0.22% and the SMH semiconductor index dropped 3.5%. Market skepticism over AI capital expenditure drove investor preference toward Apple's conservative spending approach, with Morgan Stanley data showing Apple's capex at 2.5% of projected revenue compared to 34% for hyperscaler companies including Alphabet, Amazon, and Meta. S&P 500 companies' second-quarter earnings per share growth is expected to reach record levels, supported by strong results from Coca-Cola and other firms reporting on July 29, while WTI crude oil futures fell below $80 per barrel as Iran engaged in dialogue with mediator Oman.
US Stock Indices Show Mixed Performance on July 29
The Dow Jones Industrial Average rose 1.03% and the S&P 500 index gained 0.21% on July 29 (Korean time), while the technology-focused Nasdaq declined 0.22%. The SMH semiconductor index, the benchmark for the world's largest semiconductor ETF, fell 3.5%. Coca-Cola and other major companies reporting earnings on the day delivered results that were generally strong.
Apple Market Cap Strategy Contrasts with Hyperscaler AI Spending
Morgan Stanley data shows hyperscaler companies including Alphabet, Amazon, and Meta maintain capex ratios of 34% relative to annual revenue, while Apple's capex ratio stands at 2.5% of projected revenue for the year. Apple's market cap briefly surpassed $5 trillion during trading after reclaiming the world's largest market cap position from NVIDIA. Market concerns over circular financing arrangements and AI investment sustainability have increased investor attention toward Apple's cautious investment approach.
Semiconductor Stocks Rebound in After-Hours Trading
Major semiconductor and equipment companies that declined during regular trading hours showed gains in after-hours trading. Micron rose over 1% in after-hours trading, while Seagate, a hard disk drive specialist that reported earnings after market close, gained approximately 5% in the aftermarket. Semiconductor equipment company KLA continued its decline with a 7.49% drop despite reporting results that exceeded market expectations.
Meta and Microsoft Earnings Plus FOMC Results Scheduled
Meta and Microsoft earnings reports are scheduled for release, with FOMC results also due. Microsoft's cloud business division revenue growth exceeding 30% while capital expenditure continues to rise will be a key factor, according to Wall Street analysis. Wall Street analysts state that AI pessimism could dissipate if these figures materialize.
Korean Stocks Show Defensive Sector Rotation Patterns
LS Securities analyst Hwang San-hae stated that cosmetics and entertainment sectors known as K-beauty, along with areas with individual export momentum and the biotech sector, are observed to function as effective defensive strategies when semiconductors weaken. The US stock market has shown strength in utilities, financials, real estate, and biotech when semiconductors underperform. Korean stocks tend to show synchronized declines across other large-cap stocks when Samsung Electronics and SK Hynix, the two pillars of the semiconductor sector, falter.
FAQ
What caused Apple's market cap to briefly exceed $5 trillion on July 29?
Apple's market cap briefly exceeded $5 trillion during trading on July 29 (Korean time) after reclaiming the world's largest market cap position from NVIDIA. Market skepticism over AI capital expenditure drove investor preference toward Apple's conservative spending approach, with Morgan Stanley data showing Apple's capex at 2.5% of projected revenue compared to 34% for hyperscaler companies including Alphabet, Amazon, and Meta.
How did US stock indices perform on July 29?
The Dow Jones Industrial Average rose 1.03% and the S&P 500 index gained 0.21% on July 29 (Korean time), while the technology-focused Nasdaq declined 0.22%. The SMH semiconductor index fell 3.5%. Coca-Cola and other major companies reporting earnings on the day delivered results that were generally strong, while WTI crude oil futures fell below $80 per barrel as Iran engaged in dialogue with mediator Oman.
Which sectors show defensive patterns when semiconductors weaken in Korean stocks?
LS Securities analyst Hwang San-hae stated that cosmetics and entertainment sectors known as K-beauty, along with areas with individual export momentum and the biotech sector, are observed to function as effective defensive strategies when semiconductors weaken in Korean stocks. Samsung Electronics and SK Hynix faltering tends to cause synchronized declines across other large-cap stocks in the Korean market.
