It's official: Aramco overtakes Apple as world's most valuable company
Bill Pugliano/Getty Images News

It already happened once during the intraday session on Monday, but Saudi Aramco (ARMCO) has officially topped Apple (NASDAQ:AAPL) as the world's most valuable company. The state-owned energy giant closed yesterday's session with a market capitalization of $2.43T, while the iPhone maker ended the day valued at $2.37T. In fact, it's a trend that has accelerated this year, with the energy sector buoyed by a surge in oil prices amid an inflation surge that has curbed demand for high-flying tech stocks (Aramco shares are up 30% YTD, while Apple's stock has tumbled 20% since the beginning of the year).
Commentary: "While Apple's stock has held up better than most peers, it is still subject to the great tech multiple compression, which has been witnessed as a result of central bank tightening and ramping inflation," explained Neil Campling of Mirabaud Securities. "Investors will now worry if consumers' belt tightening will lead to lower appetite to buy the ultimate consumer accessory, the iPhone."
Some say the correlation is not exactly identical since Aramco's (ARMCO) float is less than 2%, compared to the 84% of Apple (AAPL) shares that are held by the public. Others point out that Aramco (ARMCO) only trades on the Saudi Stock Exchange, known as Tadawul, making the connection somewhat of an apples (no pun intended) to oranges comparison. Saudi Aramco is also the only non-American company in the top 10 market cap rankings, and if U.S. investors want to scoop up shares they face limited choices, such as buying into the iShares MSCI Saudi Arabia ETF (NYSEARCA:KSA) that has Aramco (ARMCO) as 5% of its holdings.
Go deeper: For the past two years, investors have been laser-focused on "pandemic winners" in the technology sector. However, a historic collapse in energy investment during the coronavirus crisis has led to shortages of oil, gas, coal and refining capacity, leading some to believe the energy sector could be the next "pandemic winner." In addition, the Saudis, who are one of the world's top crude exporters, have been under pressure to raise output following Russia's invasion of Ukraine and subsequent sanctions against Vladimir Putin's regime.