Apple (AAPL) is underperforming the S&P 500 Index ($SPX) with a YTD loss of nearly 5%, following last year’s gain of only 8%. Alphabet (GOOG) has surpassed Apple to become the world’s second-biggest company after Nvidia (NVDA). Microsoft (MSFT) underperformance has affected Apple’s ranking in the top companies.

Apple became the world’s most valuable company in 2011, surpassing ExxonMobil (XOM). Until 2024, Apple held the top position except for a few brief periods. Nvidia and Microsoft surpassed Apple in 2024, reflecting the market’s valuation of artificial intelligence (AI) plays and concerns over OpenAI.

Apple received a downgrade from Raymond James at the start of the year, with concerns over stretched valuations and iPhone 17 sales being priced into the stock. Analysts have a consensus rating of “Moderate Buy” with a mean target price of $289.48, showing limited gains expected from the Cupertino-based company this year.

Apple may outperform tech peers if the AI bubble bursts, as it didn’t benefit from the AI rally. The company could see buying interest if the bubble bursts or if it steps up its game in AI. However, with a high forward P/E multiple, significant stock jumps are unlikely without innovative features.

Apple might need to introduce groundbreaking features in AI, such as an updated Siri and additional “Apple Intelligence” features, to attract market attention. It’s unlikely for Apple to become the biggest company again this year without NVDA stock falling. The stock remains at risk with a forward P/E multiple of nearly 32x.

Read more at Yahoo Finance: Will AAPL Stock Rally Again in 2026 to Help Apple Regain the Throne as the Biggest Company?