Apple Inc. has become the most valuable company in the world, its market value exceeding Saudi Aramco as a result of better than expected profits.
Apple jumped 10% on Friday, ending the day with a record market cap of $ 1.817 trillion. This is the first time the company’s valuation has surpassed that of the Saudi national oil company, which debuted on the market in Riyadh in December and is valued at $ 1.76 trillion. Before that, Apple had competed with Microsoft Corp. for the title of the largest public company in the United States.
Aramco’s dethronement comes after a tumultuous period for the Saudi company. Its initial public offering fell short of Crown Price Mohammed bin Salman’s expectations. The de facto ruler of the kingdom initially wanted a valuation of $ 2 trillion and raise $ 100 billion. But after foreign investors objected to the price, the government opted for a smaller domestic offering and raised around $ 30 billion, still the largest IPO ever.
Then came the drop in crude prices this year as demand for energy plummeted as the virus spread. Aramco’s second-quarter revenue likely fell to around $ 37 billion, from $ 76 billion a year earlier, according to analyst estimates compiled by Bloomberg. That’s less than the $ 59.7 billion in sales reported by Apple for its most recent period.
Aramco’s stock is down 6.4% since the end of December, although this is far less than the fall of other oil majors. Exxon Mobil Corp. fell 40% and Royal Dutch Shell Plc fell 50%.
Apple, meanwhile, benefited as the pandemic strengthened the market positions of the world’s largest tech companies, which have strong balance sheets and fast-growing businesses thanks to an acceleration in the shift to digital services. Shares of the iPhone maker have gained 45% so far this year.
(Adds closing stock values everywhere. An earlier version of this story corrected the market cap gain.)