Aramco takes bite out of Apple as world’s most valuable company

Unsplash

Saudi Aramco overtook US tech giant Apple as the world’s most valuable company yesterday, fuelled by a rise in oil prices  

The same global economic drivers that are buoying the energy company’s profits are adding to an inflation surge, dampening demand for technology stocks.

Aramco traded near its highest level on record, with a market capitalisation of about $2.43 trillion, trouncing Apple’s valuation for the first time since 2020. 

The iPhone maker fell 5.2 percent to close at $146.50 per share, giving it a valuation of $2.37 trillion.

The stock position swap underscores the impact of major forces shaping the global economy. 

Rocketing oil prices are driving inflation and pushing the US Fed to raise interest rates at the fastest rate in decades.

With the Fed on track to hike rates by at least another 150 basis points this year and ongoing conflict in Ukraine, energy stocks could be set to maintain their domination over tech in the near future.

“Unprecedented inflation, rising interest rates, and surging commodity prices have hit tech stocks hard,” Wes Schwalje, COO at Dubai-headquartered consulting firm Tahseen Consulting, told AGBI.

 “With tech and commodities historically trending in opposite directions, commodities such as metals and energy have benefitted. The music hasn’t stopped for tech, but it has definitely slowed down,” Schwalje said.