Money Matters - Simplified

Apple briefly beats Exxon in market value

Ten years ago, when Apple was preparing for the launch of the first iPod, the company ranked No. 287 on the S&P 500 Index.

Apple Inc. (NASDAQ: AAPL), became the largest publicly traded company in the United States on Tuesday. In what could be termed as a milestone in the world of computing, Apple temporarily surpassed Exxon Mobil Corp. (XOM) as the world’s largest business by market value.

In a day which was a perfect example ups and downs, Apple's stock price climbed, fell and then rose dramatically again.

In the last hour of trading, Apple edged Exxon exceeding it by as much as $7 billion at one point on the Nasdaq Stock Market. However, during the last moments of trading, Apple lagged behind.

Apple ended the day with its stock up 5.9 percent to $374.01 per share, valuing it at $346.7 billion while the Texas oil giant Exxon, closed the day with a value of $348.3 billion.

Shaw Wu, an analyst at Sterne Agee & Leach, said, “The Apple of today is different from the Apple of even a few years ago. People who buy Apple tend to buy big and get your friends and family to do it as well. There’s nothing else like that.”

Though Apple has been around since 1971, it hasn’t always been on top. Apple was living for years in the shadow of Microsoft and was practically on the verge of bankruptcy before Chief Executive Steve Jobs returned in 1997 and began to revamp the company.

Apple versus ExxonMobil
According to analysts the race for the top slot between Apple and Exxon Mobil will continue while the markets remain volatile.

Apple peaked at $403.41 a share on July 26. On the other hand, partly due to the financial turmoil and depressed oil prices Exxon’s value has been hit hard in the recent months.

The company’s shares that were trading as high as $87.98 in April slid to just under $70 on Tuesday night.

A prime difference between the two companies is the actual amount of revenue. Apple earns roughly $100 billion annually compared to Exxon Mobil’s $440 billion.

Andrew Lipow, a former Amoco trader and president of his own Houston consulting firm stated, “Clearly the oil market has declined substantially over the past 10 days due to the debt crisis and the cost of oil. However, we’re sure to see Exxon bounce back and forth.”

Apples stunning growth
Though Apple has been around since 1971, it hasn’t always been on top. Apple was living for years in the shadow of Microsoft and was practically on the verge of bankruptcy before Chief Executive Steve Jobs returned in 1997 and began to revamp the company.

Ever since, Apple, Inc. has had quite an amazing journey. Releasing a number of new and innovative products released like iPods, iPhones, and iPads, Apple gradually climbed to the very top of corporate ladder.

Ten years ago, when Apple was preparing for the launch of the first iPod, the company ranked No. 287 on the S&P 500 Index.

Today, Apple has joined the ranks of the 10 most valuable U.S. companies that include General Motors, IBM Corp., AT&T Inc., Microsoft Corp. and Philip Morris Cos.

Charles Golvin, an analyst with Forrester Research stated, “For Apple to continue its success they will need to leap ahead of their own innovation and design approach before their competitors, including Google and Amazon, close the gap on smartphones and tablets.”