This Company Beats Apple To Become World’s Most Valuable Company! How This Happened?
History repeated itself on Thursday, as the Saudi Arabian petroleum and natural gas Saudi Aramco surpassed the US tech giant Apple’s valuation to become the most valuable company in the world.
In 2020, Apple overtook Saudi Aramco to become the most valuable company in the world and now, in 2022, the tables have turned, much due to the surging oil prices due to geopolitical issues going on around the world.
Saudi Aramco’s Market Capitalization vs Apple’s Valuation
On Wednesday, depending upon its share price at market close, Saudi Arabia’s Saudi Aramco was valued at $2.42 trillion, while the US giant Apple’s market cap stood at $2.37 trillion.
The world’s largest oil-producing company Saudi Aramco has been gaining due to the surging oil prices, which are driving its share prices higher.
Saudi Aramco’s net income jumped 124% in the last year to $110 billion, compared to $49.0 billion in 2020.
“We continue to make progress on increasing our crude oil production capacity, executing our gas expansion program and increasing our liquids to chemicals capacity,” said the company’s President & CEO Amin Nasser.
Why is Saudi Aramco Growing & Apple Falling?
The company’s stock has surged 27% on a year-to-date basis, meaning, by far in 2022, while Apple’s share prices have witnessed a manic fall over the past sessions. It fell 5.2% on Wednesday alone, causing the US index Nasdaq Composite to tumble more than 3% in the session.
The rising inflationary pressures have caused central banks all around the globe to undertake aggressive interest rate hikes.
As a result, investors are withdrawing their funds on a faster pace from growth and rate sensitive stocks like Apple, Meta and Netflix, among other such stocks.
This is causing Apple’s shares to decline in 2022, and as oil prices are on a roll, rising to multi-year highs due to the ongoing Russia-Ukraine crisis, Saudi Aramco being an oil company, its shares are rising, thereby pushing up the valuations.