Goldman Sachs Research Report Analysis: Apple's Market Cap Surpasses Nvidia Again, Market Reprices "Spending Less"

Written by: Rita

At Monday's close, Apple's market cap returned to first place globally. Approximately 4.93 trillion USD, surpassing Nvidia's 4.78 trillion USD. Nvidia fell nearly 5% that day, while Apple rose over 1% against the trend.

Over the past month, Apple outperformed the Nasdaq 100 Index by 23 percentage points, creating the largest single-month excess return since 2005. The market is repricing one thing: as AI capital expenditure grows larger, not burning cash has become an advantage.

In Apple's Q3 earnings preview on July 27, Goldman Sachs raised the target price from 330 USD to 370 USD, maintaining a Buy rating. Goldman Sachs expects Q3 EPS to be 1.93 USD, higher than the market consensus expectation of 1.89 USD, with iPhone revenue growing 23% year-over-year to 54.8 billion USD, and Mac revenue growing 15% to 9.3 billion USD. Supporting this judgment is Goldman Sachs' confidence in Apple's "light capital expenditure, stable profit output" model.

Google Burns Cash, Apple Saves Money

Google's parent company Alphabet last week raised its 2026 capital expenditure guidance to between 195 billion and 205 billion USD, directly causing free cash flow to turn negative in the second quarter. This is the first time since its IPO in 2004. Tesla is also expanding expenditures. The stock prices of both companies fell sharply after earnings.

Apple is taking another path. Goldman Sachs data shows that Apple's capital expenditures have continued to decline over the past three quarters. In AI, Apple pays Google approximately 1 billion USD in licensing fees annually to use customized Gemini models for Siri's AI upgrades, saving the huge cash consumption of training large models.

Jay Woods, Chief Market Strategist at Freedom Capital Markets, said that Apple was once criticized for not investing more funds in AI, but now has successfully avoided some of those capital expenditure traps. Over the past 12 months, the market's pricing logic for AI infrastructure stocks was "whoever spends more is worth more," with Nvidia soaring from 200 USD to 600 USD. But now, the CDS market is starting to warn of credit risks, Google's FCF turned negative, and the market is beginning to realize: spending more does not necessarily mean earning it back, spending less is actually safer.

Android Price Hikes, Apple Picks Up Share

Memory chip prices are rising, and Android manufacturers are collectively raising prices; Samsung, Xiaomi, vivo, and OPPO are no exception. Apple also faces cost pressures, but thanks to brand loyalty and ecosystem stickiness, it has instead grabbed share amidst the price hike wave. Bernstein analyst Stacy Rasgon pointed out that iPhone's global market share has risen against the trend from 17% a year ago to 20%.

The price hike strategy of Android manufacturers is backfiring. When the entire industry is forced to raise prices, the brand with the highest user loyalty becomes the "relatively inexpensive" choice. Goldman Sachs data shows that Apple's share in the Chinese market increased by about 4 percentage points year-over-year to 18%, and this happened precisely during the cycle where Chinese local brands collectively raised prices.

Apple's own price adjustments are also proceeding simultaneously. iPhone 17 Pro and iPhone Air canceled the 128GB starting version, effectively raising the starting price by 100 USD. Mac and iPad underwent a round of price increases averaging over 20% on June 26. Goldman Sachs believes that Apple users are less sensitive to price than Android users, plus carrier subsidies and the safety net of low-priced models, the impact of price hikes on demand is limited.

The services business is also providing support. App Store growth slowed to 3%, but growth in iCloud+ and AppleCare+ is filling the gap. Goldman Sachs expects Apple's services revenue compound growth rate to be about 12% in the coming years, and the slowdown in App Store will be offset by other categories.

Thursday Earnings Are Key Verification

Apple currently has a P/E ratio of over 30 times, far exceeding the S&P 500's 22 times. Dan Niles, founder of Niles Investment Management, warned that if Thursday's earnings show semiconductor price hikes eroding profit margins, Apple could face pressure. Gross margin is the indicator Goldman Sachs is most concerned about this time, predicted at 48.2%, slightly higher than the market expectation of 48.1%. Memory chip price hikes have spread to the entire mobile phone industry; whether Apple can maintain market share while maintaining gross margin is the core highlight of this earnings report.

Thursday's earnings will also be the last conference hosted by Tim Cook as CEO. On September 1, he will officially hand over the reins to senior hardware engineering executive John Ternus. What he leaves to his successor is not only a record-breaking market cap scorecard but also a narrative being repriced by the market: in the AI era, restraint itself is also a competitive advantage.

Disclaimer

This article is a compilation and interpretation by TechFlow Research of third-party broker research reports (Goldman Sachs, July 27, 2026), combined with organized public market information. The ratings, target prices, earnings forecasts, and related judgments cited in the text are the views of the broker's analysts, represent only the position of their affiliated institution, do not represent the views of TechFlow Research, and do not constitute any investment advice.

The market has risks, decisions must be independent. This article should not be used as a basis for buying or selling any securities.