In the annals of financial markets, certain moments become epoch-defining milestones. October 28, 2025, was one such moment for US stocks.
With all three major US indices (Dow Jones, S&P 500, Nasdaq) hitting all-time highs yesterday (October 28), a milestone even more symbolic than the indices themselves quietly materialized: Apple (AAPL) market cap, driven by strong iPhone 17 sales expectations, briefly touched and then stabilized above $4 trillion.
Thus, Apple joined Nvidia (NVDA) and Microsoft (MSFT) as the third company globally to reach a $4 trillion market cap. US stocks have officially entered the "Big Three" era. This milestone comes just over three months after Nvidia first crossed the line in July.
This milestone arrives against a telling macro backdrop — the market is in the quiet period before the Fed's rate decision and a window of easing global trade tensions. This is not merely valuation inflation; it feels like a powerful "mid-air refueling" amid global economic uncertainty. What it reveals is not just a capital狂欢, but a profound shift in economic structure, technological paradigm, and market logic.
"Mid-air refueling" aptly describes the current market state: after the turbulence and valuation compression of the high-rate environment in 2024, the market in H2 2025 has not only avoided a "hard landing" but found new, stronger upward momentum. This tailwind comes from three main macro factors.
First, the monetary policy pivot is the most critical fuel for this feast. The Fed's first rate cut (25 bps) in this cycle, initiated in September 2025, is the core catalyst for valuation repair. This "dovish pivot" signals to the market that the peak of high-rate pressure has passed. The market is now holding its breath for the Fed's upcoming rate decision, with broad expectations of continued easing. For tech stocks, whose valuation models heavily depend on future cash flow discounting, lower rates (i.e., lower discount rates) mechanically and powerfully boost present values. Thus, policy easing expectations provide the most solid valuation anchor for high-valuation tech stocks.
Second, the "soft landing" combination of inflation and rates provides the realistic basis for "refueling." The policy pivot is not凭空; it's based on "manageable" economic data. The latest September CPI came in at 3.0% YoY, still above the 2% target but significantly down from its peak and trending controllably. More importantly, the 10-year US Treasury yield, the "anchor of global asset pricing," stabilized at 3.98% yesterday. This indicates that market panic over future inflation has subsided, and the cost of capital pressure has eased. A stable or declining bond yield environment is a necessary condition for risk assets (especially growth stocks) to "breathe" and "take off."
Finally, the easing of geopolitical and trade risks acts as a "pressure release valve" for market sentiment. Market sentiment is also boosted by improvements in the global trade environment. Reports indicate that senior Chinese and US economic and trade officials have reached a consensus on a preliminary trade agreement framework. Although details are yet to be released, this positive development has significantly reduced systemic risk aversion, temporarily lifting the "black swan" shadow over tech (especially semiconductors and supply chains). This allows capital to refocus on corporate growth and fundamentals rather than macro geopolitical games.
As of the close on October 28, 2025, the combined market cap of Nvidia, Microsoft, and Apple approached $13 trillion. The sheer size of this number needs no elaboration, but what's more thought-provoking is that these three giants reached the same peak via three distinct yet convergent paths. Together, they define the three most powerful business logics in the current global economy.
The leader is Nvidia (NVDA), with a market cap of ~$4.89 trillion, following the path of "AI infrastructure definer and monopolist." Nvidia was the first member of the $4 trillion club (July 2025) and is rapidly approaching $5 trillion. Its driver is clear and pure: the AI revolution. Nvidia's value foundation lies in its near-monopoly on the highest-end computing resources (GPUs) needed to power generative AI. This week, CEO Jensen Huang announced that cumulative orders for the company's AI processors (including H-series and beyond) have exceeded $500 billion, and confirmed that Nvidia will provide core computing power for seven new US Department of Energy supercomputer projects. These data points show that the market no longer views Nvidia as a semiconductor company but as the "water, electricity, and coal" supplier of the AI era. Its valuation is a direct bet on AI's total addressable market (TAM) over the next decade.
Recall when I first mentioned Nvidia two years ago What is a great company? Nvidia's 100x in 10 years and the epochal AI wave, the stock was around $500 (pre-split). Now, after the split, it's around $200 (equivalent to $2,000 pre-split), a 4x increase. It's up over 2% in after-hours trading, and if it opens like this, it could be the first $5 trillion company. It's already the absolute leader of this AI cycle.
Close behind is Microsoft (MSFT), with a market cap of ~$4.03 trillion, following the path of "AI and enterprise ecosystem fusion." Microsoft is the epitome of an "old king" wearing "new clothes." If Nvidia is the "hardware layer" of AI, Microsoft is the biggest winner in the "platform layer" and "application layer." It provides AI computing power through Azure cloud services, but more critically, through its deep partnership with OpenAI and the full rollout of Copilot products, it seamlessly integrates AI capabilities into its massive enterprise software ecosystem (Office, Windows). Yesterday (October 28), Microsoft announced a new agreement with OpenAI, allowing the latter to restructure as a for-profit company. This move was interpreted by the market as an acceleration of Microsoft's AI strategy commercialization, solidifying its absolute moat in enterprise AI applications. Microsoft's trillion-dollar market cap rests on "AI empowerment of existing businesses" and "platform monopoly of incremental businesses."
The newest member is Apple (AAPL), with a market cap of ~$4.00 trillion, following the path of "ultimate gravity of the consumer ecosystem." Apple is the most unique among the three. In the generative AI wave of the past two years, Apple has appeared relatively "quiet" or even "behind." Yet, it reached $4 trillion on October 28, relying not on cutting-edge AI narratives but on its unassailable business moat. The direct catalyst for its stock price surge was strong iPhone 17 sales in China (initial sales up 14% YoY, per Counterpoint Research). This proves that Apple's powerful brand loyalty, stable hardware (iPhone) cash flow, and high-margin services business (App Store, iCloud, etc.) remain a deadly combination. Apple's market cap demonstrates that a sufficiently strong, closed, and high-stickiness consumer ecosystem itself has trillion-dollar "gravity." It tells the market that even without leading in AI, the strongest "moat" can still reign supreme.
The combined market cap of three companies nearing $13 trillion not only exceeds the GDP of most countries but also marks an unprecedented level of market concentration. This phenomenon is profoundly reshaping capital markets and raising serious questions.
First, this is the ultimate expression of the "Matthew Effect" in capital markets. Capital is irresistibly flowing to the top companies. These three giants are not just tech companies; they have become "quasi-utilities" in their respective tracks (AI computing, AI platform, consumer ecosystem). Their strong profitability, wide moats, and ability to define future trends make them a paradoxical combination of "safe haven" and "growth engine" in the current macro environment. This "winner-takes-all" situation exacerbates the "bleeding" of small and medium enterprises in capital markets, with the innovation ecosystem facing suppression by "giant gravity."
Second, market structure is being "hijacked by indices." The gains of benchmark indices like the S&P 500 are increasingly dependent on the performance of these few companies. This creates a huge structural risk: trillions of dollars in passive index funds, whose investors intend to "diversify risk," are actually making highly concentrated bets on these three companies. This forms a self-reinforcing cycle: money flows into index funds, funds must buy these three giants by weight, driving up their stock prices, attracting more money. It also puts immense pressure on active fund managers, as underperforming these three stocks almost means underperforming the market.
Finally, the debate over an "AI bubble" is becoming increasingly urgent. Are such high valuations a reasonable pricing of a "new paradigm" or "irrational exuberance"? We must be rigorous. On one hand, unlike the 2000 internet bubble, today's giants (especially Nvidia) have real orders ($500 billion) and earnings support. This looks more like a "rational bubble" based on real demand. However, the risk is that current stock prices have already priced in nearly perfect growth for years to come. This means any growth deceleration (even from "very high" to "high") could trigger a sharp valuation correction, leading to a stampede-like pullback. So, as the title suggests, US stocks are in the process of bubbling. This process is undoubtedly risky and investing is extremely difficult, but profits can be substantial. What we need to do is constantly monitor the developments of these leading tech companies, manage positions, and strive to exit orderly before the bubble bursts, taking profits with us.
Risk Disclaimer: The views in this article are for reference only and do not represent any investment advice. Market risk exists; invest with caution.
