Apple, previously the most valued company in the world, has lost its title to a Saudi oil firm. Saudi Arabian Aramco has snatched the title of the world's most valuable company from Apple due to surrounding financial aspects.
Apple is No Longer the World's Most Valued Company
According to the story by 9to5Mac, Apple, the long time holder of the title "world's most valuable company" has lost it to a Saudi Arabian oil company. Bloomberg points out that the loss of title can be attributed to the increase in inflation and the prices of oil surging up.
Along with the announcement of Aramco taking over the title, Apple stock fell by 3.9% on the New York Stock Exchange (NYSE). The Saudi Arabian oil company hit a market capitalization of $2.43 trillion for the first time since 2020.
Apple's Market Value Now Sits at $2.37 Trillion while the Company is Now Ranked #2
Earlier this year, Apple's market value reached $3 trillion which, at that time, beat Aramco's market value at $1 trillion. The shift in title happened when the Aramco's value increased by 27% while the Cupertino giant's valuation fell by 16%.
As of press time, Companies Market Cap puts Apple's valuation at $2.37 trillion. As per the website, the Cupertino giant has had a 15.49% growth in the span of one year and is now ranked #2 instead of its previous status at #1.
The shift in company valuations comes at a time where the "ever-growing inflation" results in interest rates being increased at a high pace by the Federal Reserve. On top of the heightened interest rates, oil prices have also surged which results in better profits for Aramco.
Due to the changes, 9to5Mac states that investors are now "overlooking tech firms." Due to the loss of interest in tech firms, stocks have started to plunge along the way.
Investors are Moving Away from Tech and Moving Towards Energy
Tim Ghriskey, an Ingalls & Snyder senior portfolio strategist, states that he believes that recovery could take a while. Tech giants are struggling to maintain dominance as interest rates are increasing and the situation with Ukraine seeing no immediate or soon resolution.
Ghriskey states that there is a lot of tech company and "other high-multiple names" panic selling with the money being redirected towards energy. With the situation at hand, it was stated that energy looks like a favorite outlook based on the prices of commodity.
Apple Expects its Q3 Results to be Affected Due to Supply Chain Problems
The senior portfolio strategist then noted that Aramco, along with other companies, are now significantly benefiting from the change in direction. With more and more eyes looking towards energy compared to technology, Aramco was able to beat Apple as the world's most valued company.
The restrictions in supply chain have also been a hindering factor for the iPhone maker. As per Apple's Q2 2022 annoucnement, its Q3 results could be impacted due to expected supply chain problems.
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This article is owned by Tech Times
Written by Urian B.
