Saudi Aramco surpasses Apple to become world’s most valuable company

Saudi Aramco surpassed Apple on Wednesday to become the world’s most valuable company on the back of increasing oil prices that drove up its shares. The Saudi Arabian national petroleum and natural gas company was valued at $2.42 trillion, while Apple, that has seen a dip in its share price over the past month, was valued at $2.37 trillion. The figures are based on the prices of shares at the time of market closing on Wednesday. 

While Apple might be seeing sinking share prices, its profits in the first three months of this year were better than expected. However, it expects June quarter results to dent by $4-8 billion due to the ongoing supply crisis and the Chinese COVID-19 lockdown. 

The company said during a conference call that it's still struggling to get enough chips to meet demand and contending with COVID-related shutdowns at factories in China that make iPhones and other products. “It will affect most of the product categories,'' Apple CEO Tim Cook told analysts.

On the other hand, Saudi Aramco reported a 124 per cent surge in net profit in the last year from $49.0 billion in 2020 to $110.0 billion in 2021. Hours after this Yemeni rebels attacked its facilities, which caused a temporary drop in production. 

Saudi has been under pressure to raise output amid the Russian invasion of Ukraine, and the subsequent sanctions on Moscow that rendered global energy markets volatile. Saudi Aramco president said that the company’s outlook remained uncertain due to geopolitical tensions. 

However, as oil prices soar, it will further drive inflation, forcing the Federal Reserve to raise interest rates. With higher interests, investors will discount the value of future revenue flows from tech companies due to company costs and supply chain woes, triggering a dip in their stocks. While inflation will increase the cost of oil, it could also cause a drop in consumption, reducing oil demand. 

(With agency inputs)

Also read: Apple delivers strong quarterly results, but warns of trouble ahead