Conflict Shakes Up Valuation Rankings

Aramco recently became the world’s most valuable publicly listed company, taking the crown from Apple.

In May, Saudi Aramco became the world’s most valuable listed company, taking the crown from Apple. Is this a symbolic sign that the old economy, in the current market turmoil, is regaining the upper hand?

Bloating energy prices after the Russian invasion of Ukraine boosted profits of all major oil groups and made their outlook rosier. Aramco reported an 82% increase in its first-quarter net income, rising to $39.5 billion—its best result since listing its shares in 2019. In the same period, Exxon earned $5.5 billion, more than double the $2.7 billion in the same period of 2021.

In a reversal of what is happening today, in 2011 Apple surpassed Exxon to become the world’s most valuable listed company. (Back then, Aramco wasn’t yet listed.) In the ensuing decade, Apple—along with Microsoft, Google owner Alphabet and Amazon—dominated the stock market and economic scene.

Things changed dramatically in 2022, when the war boosted commodity prices, particularly oil and gas. At the same time, higher inflation eroded consumers’ purchasing power, giving online advertisers and tech-gadget producers less space to maneuver. While Apple’s share price declined around 20% since the start of the year, Aramco’s gained 28%.

“Apple posted better-than-expected results in the quarter ended March 2022. However, amid the increasing supply chain constraints on account of the rapidly changing global geopolitical scenarios, silicon shortages and intense lockdowns in China, the company anticipates that the June quarter could take a revenue hit ranging between $4 billion and $8 billion,” says Parth Vala, an analyst at GlobalData, a leading data and analytics company.

Apple has regained ground, and toward the end of May was head-to-head with Aramco. Both companies have a capitalization flirting around $2.4 trillion. But looking at rankings by market capitalization, oil giants are still in the minority. Microsoft is in third position, with around $2 trillion; Alphabet, $1.5 trillion; and Amazon, $1.2 trillion. The second-largest oil company, Exxon, is in 15th place overall, after Tesla, Berkshire Hathaway, Meta and others.