Saudi Arabian oil company, Aramco, has surpassed Apple by becoming the most valuable company. The development is a result of surging oil prices and increased shares while tech giant’s stocks keep plummeting.
Aramco is Saudi Arabia’s national petroleum and natural gas company. Currently, it’s viewed as the largest oil company in the world.
At the end of the market close for the week, the market cap was estimated at $2.42 trillion based on its shares evaluation.
On Wednesday, after all the trading came to a close, Apple shares depreciated to a value of $2.37 trillion.
However, Apple reported that the first three months of the year was a huge profit despite the plunging share price. The company says it’s facing the effect of the lockdown of the pandemic on China.
The lockdown caused a blockage in their supply chain. Investors believe that the decline in shares could cause a massive imprint on June’s quarter results.
Analysts explain that the difference in shares between the two companies is the effect of the ongoing war in Ukraine and the post-effect of the coronavirus recovery.
The insanely high demand and cost of oil prices are attributed to the skyrocketing of Aramco. Sadly, tech companies around the globe can’t say the same for themselves.
Over the past few months, stocks of tech companies have seen the red line and fallen tremendously.
People are less concerned about purchasing high-tech gadgets as inflation continues to loom and the central bank pulls out excess liquidity from circulation. Energy and power shares have recovered a great fit.
Data has revealed that Apple has plunged close to 20% since the beginning of the year. Aramco, on the other hand, rose by 27% at the moment in the year. The company said that its yearly profits doubled last year due to the unstable oil prices.
The Chief Financial Officer, Luca Maestri was on a conference call with analysts saying, “Supply constraints caused by COVID-related disruptions and industry-wide silicon shortage are impacting our ability to meet customer demand for our products.”
As other companies try to patch things up post covid, the company said, “Aramco’s net income increased by 124% to 110 billion in 2021, compared to $49.0 billion in 2020.”
Uncertainty for the leading oil-producing giant?
In a statement, the president and CEO of Aramco, Amir Nasser, advised that the company’s view remains uncertain due to “geopolitical factors.”
The company has stated that it has been under massive pressure to increase its revenue amid Russia’s invasion and that the sanctions imposed on Moscow have affected global oil markets.
Though the company has resisted the impulse to cut down oil prices. The only factor that could prevent the boosting of the company’s revenue would be inflation.