Saudi Aramco surpassed Apple on Wednesday to become the world’s most valuable company due to rising oil prices. Saudi Arabia’s National Petroleum and Natural Gas Company was valued at $ 2.42 trillion, while Apple, which lost its share price last month, was valued at $ 2.37 trillion. The figures were based on the share price during the closing of the market on Wednesday.
Although Apple shares are falling, its profit in the first three months of this year was better than expected. However, the June quarter results are expected to fall by $ 4-8 billion due to the ongoing supply crisis and the Chinese COVID-19 lockdown.
The company said during a conference call that it was still struggling to get enough chips to meet demand and was struggling with covid-related shutdowns at Chinese factories that make iPhones and other products. “This will affect most product segments,” Apple CEO Tim Cook told analysts.
On the other hand, Saudi Aramco reported a 124 percent increase in net profit last year from $ 49.0 billion in 2020 to $ 110.0 billion in 2021. Hours later, Yemeni rebels attacked his compound, causing a temporary drop in production.
Russia’s aggression in Ukraine, and subsequent sanctions on Moscow, have led to Saudi pressure to increase output, which has destabilized global energy markets. The president of Saudi Aramco said the company’s outlook remained uncertain due to geopolitical tensions.
However, as oil prices rise, it will drive further inflation, forcing the Federal Reserve to raise interest rates. With high interest, investors will discount the value of future revenue flows from technology companies due to company costs and supply chain problems, which will trigger a decline in their stocks. Although inflation will push up the price of oil, it can also lead to a decline in consumption by reducing the demand for oil.
(With agency input)
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