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Saudi Aramco overtakes Apple as world's most valuable company

Saudi Aramco Members of media chat before the start of a press conference by Aramco at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019. REUTERS/Hamad I Mohammed
Saudi Aramco on Wednesday dethroned Apple as the world's most valuable company. Photo: Hamad I Mohammed/Reuters

Saudi Aramco (2222.SR), the largest oil-exporting company, surpassed Apple's (AAPL) market value to become the world’s most valuable company.

The Saudi Arabian oil company’s market capitalisation on Wednesday was $2.426tn (£1.995tn), exceeding Apple’s $2.415tn by just over $10bn.

A surge in oil prices that is buoying the crude producer helped Aramco trade near its highest level on record.

Brent crude, the global benchmark, has climbed about 36% so far this year, and was last trading at $106.2 a barrel.

Read more: FTSE 100 tumbles as recession fears rise after UK economy shrinks

That has buoyed players like Saudi Aramco, whose shares are up 27% so far this year.

It's the first time Saudi Aramco has reclaimed the top rank since 2020, and it comes after a year-long sell-off in technology stocks.

In early January, Apple became the first company to reach a market capitalisation of $3trn, though its stock has fallen in recent months as investors reconsider the tech sector's valuations in light of the Fed's tightening and concerns that inflation will weaken consumers' spending habits.

The iPhone maker has been weighed down by major supply chain headaches, particularly in China, where several of its suppliers' factories have been temporarily caught in the country's COVID lockdowns.

Read more: Is the UK heading into a recession?

Apple’s shares fell 5% on Wednesday, taking its losses in 2022 to almost 18%, as the Wall Street selloff continued.

Victoria Scholar, head of investment at Interactive Investor said: "A combination of rising oil prices and tech sector turmoil have sent both stocks in opposite directions with Apple losing its top spot. Earlier in the year Apple became the first company ever to reach a valuation of $3 trillion but with concerns about inflation and Fed tightening and a sell-off in tech, the iPhone maker has been dragged down amid the turmoil, slumping 5% yesterday and shedding nearly 20% since the March high.

"Although the Fed’s tightening path poses a risk to the more debt-dependent stocks in the tech sector, broader uncertainty has unfairly punished tech stalwarts like Apple and Microsoft which have strong fundamentals and cash positions.

"Once inflation passes its peak and the growth outlook improves perhaps later this year, arguably these stocks have the potential to outperform as the tech sector looks beyond its trough.”

There’s “something symbolic in tech being overtaken by oil”, said Neil Wilson of Markets.com.

Watch: Why are gas prices rising