Apple overtakes Aramco as World’s Most Valuable Company
Tech giant Apple has overtaken oil giant Saudi Aramco as the world’s most valuable company, a clear indication of the challenges facing the oil sector.
Tech is reveling in the coronavirus, smoothly transitioning workers to remote work and a magnet for those looking to sink money into “stay at home” stocks. Not so for the oil industry, which has struggled on multiple fronts, including an excess of oil and crashing demand.
Apple’s stock did well on Friday after a tremendous Q2 report, and its market cap rose to $ 1.8 trillion.
Meanwhile, Exxon’s earnings report—the second- largest energy company after Aramco-- was anything but great, with rumors that Exxon is planning some significant cuts to jobs and spending so it can keep kicking out that beloved dividend.
Aramco’s Q2 report will not be available until August 9, and it will be a reflection of the overall state of the oil market in Q2—in other words, it isn’t going to be pretty. Aramco’s Q1 profit fell 25%, and that was well before the coronavirus infiltrated the world and created widespread lockdowns. In fact, oil prices were only really low during the last few weeks of Q1.
But in March, Aramco lowered its April OSP. In April, it lowered May’s OSP; each cut another blow to the world’s largest oil producer. It wasn’t until May when Aramco boosted its next-month Osp—the last month of the quarter.
This will likely result in Aramco’s Q2 revenue coming in south of $ 40 billion, compared to $ 75 billion this time last year. Compare that to Apple’s nearly $60 billion in revenue for the quarter, and you have a new king of the hill.