Aramco oil tanker takes the crown from Apple

The Saudi oil company Saudi Aramco has just overtaken Apple as the world’s No. 1 market cap. But this is not the first time.

When it went public on December 6, 2019, Aramco easily managed to raise $25 billion and get a valuation of 1 700 000 000 dollars. Admittedly, this was less than the $2,000 billion planned capitalization and $100 billion raising that Crown Prince Mohammed bin Salman had hoped for when the project was announced four years earlier. But it was still the biggest IPO in history, throwing the Saudi oil giant straight to the top of the podium at the time (Apple 1 200 000 000Microsoft – 1.140 billion and Alibaba – 1.051 billion).

Pandemic makes tech jump, rising rates make it fall

But after the Covid pandemic, which has accelerated the digitalization of companies in all directions and sustainably, Apple’s stock price has returned to the top. After regaining its crown in August 2020, Apple jumped to stratospheric levels until it crossed the bar on January 3, 2022, at the height of the Wall Street bull cycle. 3 trillion dollars in market valuation (the stock peaked at $182), a level that no other company has ever reached.

Patatras, since January 5, in the wake of the tightening of monetary policy initiated by the Fed (rising rates causing a drop in Tech) to combat galloping inflation in the United States, the Nasdaq index has fallen, provoking a war in Ukraine since February 24, the situation has escalated. In the balance sheet, the cumulative loss of the technology sector since the beginning of the year has reached -25%.

April on Wall Street, weighed down by technology, inflation and even… oil

Apple’s share price has fallen 21% since the beginning of 2022.

And yesterday, Wednesday, May 11, 2022, on the New York Stock Exchange, the tech heavyweights had one of their worst days of the year, with Microsoft -3.32%, Tesla -8.25% and Meta (formerly Facebook) -4. 51%. Action Apple rebounded strongly, yield fell to -5.18% around 4:00 pm to close at $145.50 at the valuation $2.371 billion. In fact, compared to 3 billion at the beginning of January, the Cupertino company’s valuation is down.21%.

However, in tech, Apple is by far one of the top performers: even if its fiscal second quarter shows signs of slowing down, sales are up again, beating analysts’ expectations. However, for the first time since the fourth fiscal quarter of 2020, Apple has posted single-digit quarterly growth.

Analysts say Apple is running out of steam, and unfortunately Tim Cook’s explanation lacks clarity.

Aramco share price up 27% since January

On the other hand, with the easing of restrictive measures to combat Covid and the sustainable recovery of the global economy, fossil fuel prices are risingoverestimating the results of oil companies, the first of which, the pearl of the Wahhabi kingdom of Saudi Arabia, Aramco, which once again upset the world ratings.

Thanks to the recent spike in crude oil prices, the market capitalization of Saudi Aramco, Saudi Arabia’s national oil company, has reached $2.430 billion on Wednesday outperforming the iPhone maker by just over 2%, according to Bloomberg.

Aramco shares closed at 45.50 SAR, down 0.98% on the session but up 27% year-to-date as higher oil prices supported energy companies.

The rise in oil prices is a combination of several factors: mainly the increase in global demand with the resumption of economic activity on the one hand, and insufficient supply on the other, the difficulty of producing countries in increasing their production capacity, with the exception of Saudi Arabia, but which is forced to remain as part of the progressive increase adopted within OPEC.

Oil: OPEC+ should remain cautious despite risk of European embargo against Russia

Hydrocarbons, the rough school market after the pandemic

In recent years, the commodity market, and especially the hydrocarbon market, has been challenging. Recall that in March 2020, due to the coronavirus pandemic, global activity froze, and the stock markets of the Persian Gulf fell sharply, and in the process, Saudi Aramco shares fell below the IPO price on the stock exchange for the first time.

But in August 2021, as the price of a barrel nearly doubled in a year — a recovery in global demand obliges — the Saudi oil giant announced that it had nearly quadrupled its second-quarter earnings to $25.5 billion… had already paid its dividends to shareholders in the amount of $18.8 billion.

Oil: Aramco quadruples earnings (+288%) and receives dividends

And most recently, in February last year, in the wake of soaring oil prices, Saudi Arabia, under the leadership of Crown Prince Mohammed bin Salman (MBS), decided to prepare for a carbon-free future and finance it with the huge profits of Saudi Aramco: the State Oil Company was ordered to transfer about 4% of its shares to the Saudi sovereign fund PIF, responsible for the decarbonization of the economy.

Saudi Arabia’s sovereign wealth fund is buying over 4% of Aramco for $80 billion to fund the country’s future.