by apple (AAPL) – Get the Apple Inc report just lost a coveted title.
The iPhone maker grabbed this crown in 2020 due to the financial performance that made investors dizzy with the strong sales of its hardware – iPhone, Mac, Apple Watch – and the increase of services.
This revenue continued to grow thanks to the Covid-19 pandemic that saw the world stay connected through technological tools. The Cupertino-based company in California also managed to reassure investors who were worried about the supply chain disruption caused by lockdown measures and the lack of chips.
So it’s no surprise that Apple overtook Saudi oil giant Saudi Aramco to become the most valuable company in the world. Apple became the first company in the world to reach $ 3 trillion.
Two years later, the world has changed. The economies reopened. Inflation is rampant. Supply chain issues have deepened with new lockdowns in China and rising commodity prices following the Russian invasion of Ukraine. Fears of a recession have never been higher among investors. And as expected, it is the technology sector that pays the highest price.
Apple is no longer the most valuable company in the world
From pioneering companies to tech giants, almost no one has escaped. Shares of Apple fell 17% to $ 177.08 in January. Billions of dollars in market capitalization have evaporated.
At the same time, the energy sector is booming. Crude oil prices have soared due to supply concerns following Russia’s conflict in Ukraine. WTI crude oil rose 46.9% in January. As a result, the shares of energy companies have risen sharply. This is true of Saudi Aramco shares, which have gained just over 25% since January.
The Saudi giant announced on March 20 that its net income increased by 124% to $ 110 billion in 2021, compared to $ 49 billion in 2020. The company benefited from the rise in oil prices. Brent Crude, the global benchmark, rose almost 80% during the period.
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Saudi Aramco thus seized the opportunity to regain the crown of the most valuable company in the world. The company had a market capitalization of $ 2.382 trillion on May 13, compared with Apple’s $ 2.381 trillion, according to FactSet. Saudi Aramco has held the crown since May 11.
Given the current market volatility, it is a safe bet that the two groups will exchange this crown throughout the year. Apple CEO Tim Cook has warned in recent quarterly results that a lockdown in China and a war in Russia would cost the company between $ 4 billion and $ 8 billion this quarter.
“Understandably, Cook could not have predicted when the supply problems would clear up. He’s talking about the number of moving parties playing. Probably December 22,” said Loup Funds co-founder Gene Munster.
“$ AAPL effectively boosted June revenue to $ 83 billion, compared to Street at $ 87 billion, mainly due to the supply chain wind and to a lesser extent FX and Russia.”
Munster added: “The good news is that there is a demand, they just can’t keep up with it.”
Apple could take advantage of the expected release of the iPhone 14 in the second half of 2022 to overtake Saudi Aramco, but to do so the group will have to control the supply chain.
Microsoft (MSFT) – Get the Microsoft Corporation Report with a market capitalization of $ 1.95 trillion is third. The software giant is followed by Alphabet (GOOGL) – Get the report Alphabet Inc. Category A with a market capitalization of $ 1.53 trillion and Amazon (AMZN) – Get the Amazon.com, Inc. report with $ 1.15 trillion.
Tesla (TSLA) – Get the Tesla Inc reportThe electric vehicle maker is sixth with a market capitalization of almost $ 800 billion, despite the turbulent April due to the ongoing acquisition of Twitter (TWTR) – Download Twitter Report, Inc by CEO Elon Musk.
Warren Buffett’s Berkshire Hathaway Group (BRK.A) – Get a Class A Report from Berkshire Hathaway Inc is seventh with a market capitalization of $ 683.38 billion, followed by Mark Zuckerberg’s Meta Platforms (FB) – Receive a Category A Report from Meta Platforms Inc with $ 567.85 billion.
