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Saudi Aramco overtakes Apple as the most valuable company in the world | Aramco

Apple has lost its position as the world’s most valuable company for oil giant Saudi Arabia AramcoBecause soaring commodity prices have inflated the profits of energy companies and technology stocks have continued to fall.

This year, Saudi Aramco has become a prey as a sign that the old economy is reasserting the new economy. Apple Wednesday night in an ongoing rout on Wall Street.

Apple I had Become the world’s first $ 3 trillion company in early JanuaryIt fell 18% this year, seeing its stock fall another 5% on Wednesday and its value dropped to $ 2.37tn (£ 1.94tn).

As a result, the iPhone maker’s rating fell below Aramco. Aramco’s market capitalization reached $ 2.43 trillion this quarter, boosted by the rise in oil prices since the beginning of the Ukrainian War.

The rise of Aramco surpasses Apple’s other energy giant, ExxonMobil The most valuable listed company in the world.. Since then, Apple, Microsoft, Google owners Alphabet, and Amazon have dominated the stock market, surpassing the $ 1 trillion valuation and pushing oil giants from the top ranks. Only Saudi Aramco is regularly featured among the most valuable.

Markets.com’s Neil Wilson said there was “something that symbolizes technology being overtaken by oil,” adding that “this bear market steamroller” is pushing stocks down.

Both companies have previously exchanged top spots.Aramco has become the largest listed company in the world When listed on the Saudi Stock Exchange in Saudi Arabia If it was a public company 10 years ago in December 2019, it would have been bigger than Exxon.Apple soared Overtake Aramco in July 2020 Pandemics have boosted demand for technology products and services.

This latest change of guards highlights that Russia’s invasion of Ukraine, the surge in inflation, and the current blockade of Covid-19 in China have all caused economic turmoil.

Parth Vala, an analyst at Global Data, said: “But as supply chain constraints increase due to rapidly changing global geopolitical scenarios, silicon shortages, and severe blockades in China, the company’s June quarter revenues range from $ 4 billion to $ 8 billion. I expect it to be. “

In contrast, Aramco has doubled last year’s profits, resulting in significant revenue and revenue growth. With first-quarter earnings scheduled for Sunday, net income is expected to nearly double in the January-March period to about $ 38 billion.

“The conflict between Russia and Ukraine has caused global energy prices to skyrocket, and as a result, energy companies have booked significant top-line and bottom-line growth,” Vala added.

Much of Aramco’s oil is located on land or in shallow tap fields, so production costs are particularly low. This will improve the profitability of the company, which is 95% owned by the Saudi Arabian government.

James Meyer, Chief Investment Officer of Tower Bridge Advisors, points out that Apple and Aramco, while clearly benefiting from tight commodity markets, are incomparable in terms of business and fundamentals. “They are benefiting from inflation and tight supply,” Meyer said.

Due to the invasion of Ukraine, oil has reached a high of about $ 130 a barrel for the first time in 13 years. Although prices have fallen, Brent crude is still trading at $ 105 a barrel, up from $ 77 at the beginning of the year.

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Soaring energy and food prices this year will allow consumers to spend less on non-essential items such as technology products. Rising interest rates are also damaging the value of “growth stocks” such as tech companies, and higher returns are promised in the future.

Over $ 1 trillion was wiped out of the valuation of major tech stocks in the United States last week after the US central bank reiterated its determination to cool inflation from its 40-year high.

The Nasdaq Composite index plummeted 27% this year, 20% from the beginning of April, while Vanguard’s energy index fund surged 34% in 2022.

Previous loved ones during the Covid blockade were downgraded this year with Netflix down 72% and Peloton down 65%.

This is a similar story in the UK, where online grocery company Ocado shares more than half this year. Ocado, which was worth more than Tesco, the UK’s largest supermarket chain in September 2020, is now below Sainsbury’s, the second largest grocery store.

Saudi Aramco overtakes Apple as the most valuable company in the world | Aramco

Source link Saudi Aramco overtakes Apple as the most valuable company in the world | Aramco

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