Saudi Aramco dethrones Apple to become world's most valuable company
What's the story
Saudi Aramco, the petroleum and natural gas giant from Saudi Arabia, has dethroned Apple to become the most valuable company in the world. Aramco, the largest oil-producing company in the world, reported a market capitalization of $2.43 trillion, thus trumping Apple's $2.37 trillion capitalization. The shift at the top is attributed to surging crude oil prices and slumping tech stocks.
Context
Why does this story matter?
Saudi Aramco's rise to the top and Apple's simultaneous fall can be seen as an inverse of what happened during the pandemic. Rising inflation has brought tech companies back to the ground from the pandemic high. The petroleum industry is indeed recovering, but unstable geopolitical situations still hang over the heads of companies like Aramco. This rise could be momentary for all we know.
Rise
Soaring oil prices led to Aramco's rise to the top
Saudi Aramco's rise to the top of the pile has been aided by the surging oil prices around the world. Brent crude was priced at $107.51/barrel on Wednesday. The high price along with the supply issues created by the Russia-Ukraine crisis has the oil companies running wild. Aramco recently reported a 124% increase in its net income after recovering from pandemic-inflicted losses.
Fall
Inflation fear has led to large-scale dumping of tech stocks
On the other end, technology stocks are going through a bearish run globally. The US Federal Reserve's decision to raise interest rates to tackle inflation has led investors to panic sell tech stocks. Apple, which reported best-ever March quarter with $25bn profit, is also feeling the brunt of this. The tech giant's sales were also impacted by disturbed supply-chain and COVID-19-induced lockdowns in China.
Bio
Saudi Aramco generated over $25.6bn through its IPO in 2019
Officially known as the Saudi Arabian Oil Company, Saudi Aramco was established in 1933. It is a primarily state-owned company. Until its IPO in 2019, the world did not know much about Aramco. The public offering raised $25.6 billion, making it the largest IPO globally to date. In 2021, it had earnings of $208.5 billion, which pushed it to the top of the pile.