Saudi Aramco May Soon Challenge Apple’s Dominance As World’s Most Valuable Firm

Apple, an American multinational tech company is a renowned firm that has its specialty in consumer electronics, software and other online services and as at January last year was the largest information technology company by revenue with a total of $365.8 billion dollars, making it the most valuable company in the world. It is also ranked as one of the Big Five American American information technology companies, in the mould of Alphabet, Amazon, Meta and Microsoft.

Though Apple still maintains that position as the most valuable firm, that position may change soon if we are to take into cognizance the spiralling growth of Saudi Arabia public petroleum company, Aramco.

With total revenue of 229.billion USD in 2020, being one of the largest company globally by revenue, Aramco not only has the world’s second largest proven crude oil reserves, it has the largest daily oil production of all oil producing companies.

With the recent surge in oil prices, the highest since 2008, the shares of the company has skyrocketed to 15 percent in less than three weeks, and in the process having a market capitalization of over $2.3 trillion.

Apple in comparison has had it shares go on a downward spiral, having had a 11 percent fall this year in the wake of broad market selloff, with his market value reduced to around $2.6 trillion.

Aramco is on a roll and is playing catch-up with Apple, threatening the iPhone maker dominance but despite still more than 10 percent away from the top spot, the oil giant surge in energy prices in the wake of the Russian-Ukraine conflict (Imposed sanctions on Russian Oil), has raised the bar for an eventual dethronement of Apple.

“Everybody wants to stick to commodities,” said Mazen Al-Sudairi, Al Rajhi Capital’s head of research. With oil at $130 a barrel, Aramco’s earnings — due later this month — are set to get a big boost, giving the oil giant room to increase its dividend, he said by phone to Bloomberg.

Aramco is not new to the top, as it held the world most valuable company for a brief period in September 2020, occasioned by the Coronavirus pandemic that put global markets on the spot.

Apple overtook it and has continued to maintain dominance ever since then except for several weeks in October and November 2021, when an earnings miss for Apple allowed software giant Microsoft Corp. to occupy the number-one position.

Apple remains the best performer among the mega-cap companies in 2022 despite its 11 percent drop as it beats a 19 percent decline for the Nasdaq 100 index.

But with the Russian sanctions biting harder with oil prices upped, Saudi Aramco with this momentum will well overtake the tech giant.

Will it happen soon or never?

Time will tell.