It became known that the Saudi oil company Saudi Aramco overtook Apple in market value for the first time since 2020. During trading on May 11, the value of Apple shares fell by 4.5% to $147.63 per security, and the capitalization amounted to $2.38 trillion. At the same time, Saudi Aramco shares lost 0.98% in price, and the company’s capitalization amounted to $2.43 trillion.
The world leader in terms of capitalization has changed amid rising oil prices and accelerating inflation. The Federal Reserve is having to raise rates, putting demand for tech stocks under pressure. It is also noted that the Nasdaq 100 index (which unites the 100 largest non-financial companies of the exchange) has fallen by 26.3% since the beginning of the year. The price of Apple shares on January 3, 2022 reached $182.86 per security, and capitalization rose to $3 trillion. At the same time, since the beginning of the year, Apple shares have lost 17.3% in price, while Saudi Aramco securities have grown by 27%.
Apple has ceased to be the most valuable company in the world
According to Ingalls & Snyder, the technology sector will be able to improve its position in the foreseeable future. This assumption is based on the forecast that the Fed will continue to raise rates during the year, at least another 150 basis points. “We are seeing panic sell-offs in tech and other high-multiplier companies, and the money from there seems to be flowing into the energy sector, which is currently facing a very favorable outlook given commodity prices. Companies such as Saudi Aramco are benefiting greatly under the current circumstances ,” said an Ingalls & Snyder spokesperson.
At the beginning of the year, Apple became the first company with a market capitalization of $3 trillion; but since then, Apple stock has been falling, and especially the decline has intensified recently. As a result, Apple lost the title of the most valuable company on the planet; it was surpassed by Saudi Aramco.
According to Bloomberg, the market capitalization of the national oil company was $2.43 trillion, while Apple was $2.41 trillion. The agency attributes weakness in tech stocks (including Apple) in 2022 to inflation concerns; and a more aggressive US Federal Reserve policy. Supply chain restrictions also played an important role. At the same time, Saudi Aramco securities jumped in price by almost 30% in 2022 due to rising oil prices. But, with the launch of the iPhone 14 series later this year; the situation may change and we may see Apple again as the most valuable company in the world.
