Apple is no longer the most valuable firm in the world. Aramco, the Saudi Arabian oil giant, presently holds that position. According to Bloomberg, this turnaround is due to a rise in oil prices caused by present inflationary pressures.
Aramco, with a market capitalization of $2.43 trillion, has eclipsed Apple for the first time since 2020. The Cupertino company’s shares was down 3.9 percent on the New York Stock Exchange at 1:05 p.m.
ET today (NYSE). Earlier this year, Apple disclosed its $3 trillion market worth, which is around $1 trillion more than Aramco’s. Since then, the firm has declined 16% while Aramco has increased by 27%.
While rising oil prices benefit Aramco’s profitability, rising inflation forces the Federal Reserve to raise interest rates at a rapid pace.
As a result, investors are passing over technology companies, leading stock values to fall.
It will take time to recover
Tim Ghriskey, Senior Portfolio Strategist at Ingalls & Snyder, feels it will be some time before IT businesses rebound.
With the Fed expected to keep raising interest rates and little indication of a settlement in Ukraine, tech behemoths are struggling to preserve their supremacy.
There’s panic selling in a lot of tech and other high-multiple names, and the money coming out of there seems headed in particular for energy, which for now has a favorable outlook, given commodity prices. Companies like Aramco are benefitting significantly from this environment.
Supply chain restrictions caused by global conflicts will continue to affect Apple for some time.
Apple just released its earnings results for the second quarter of 2022, and the firm said that supply chain issues would have an effect on its Q3 results.
Within the industry, however, Bloomberg notes that Apple stock is still relatively safe to purchase since the business has maintained stable growth this year.
Despite Aramco’s victory, Apple remains the most lucrative business in the United States, with Microsoft coming in second.
