Apple Inc. (AAPL) & Exxon Are Inseparable At The Moment: Can It Last?

Apple Inc. (AAPL) & Exxon Are Inseparable At The Moment: Can It Last?
ElisaRiva / Pixabay

Apple Inc. (NASDAQ:AAPL) is now neck and neck with Exxon Mobil Corporation (NYSE:XOM) in terms of market value. The iPhone maker has tumbled over the recent past thereby cutting on its once undisputed market cap of about $662 billion.

Apple Inc. (AAPL) & Exxon Are Inseparable At The Moment: Can It Last?

However, on the first day of trading this week, Apple closed the day capped at $422 billion, compared to $415 billion of Exxon Mobil. The ~$7 billion difference might seem too large, but it is a figure that could swing within a couple of hours. In deed, we have seen Apple fluctuate widely in the recent past, which makes the market cap battle between the iPhone maker and Exxon too close to call.

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Apple’s Time as the World’s Largest Company by Market Cap Short-Lived?

You will have to roll back just over twelve months to identify a similar scenario between these two companies. If Apple’s current downfall continues, then the tech giant could soon find itself well below the nose of Exxon’s market cap, with the oil and gas giant reclaiming the position it held for such a long time.

On the other hand, it would be such a short-lived success as the world’s largest company for Apple Inc. (NASDAQ:AAPL). The iPhone maker will have lasted just over a year  as the most valuable company.

AAPL Market Cap Chart

AAPL Market Cap data by YCharts

While this battle sounds as though it has always been about Apple and Exxon, Microsoft Corporation (NASDAQ:MSFT) has been a strong challenger as it was once the world’s most valuable company in 2002 before tumbling down the following year.

The company was back up within months to reclaim the top spot again from Exxon, but since 2004, it has played second fiddle to the Oil and gas company. Apple overtook Microsoft in 2010, and as we noticed, notched an all time high market cap of about 662 billion in September 2012, having out-staged Exxon in January.

Apple’s fall since September is a replica to Microsoft’s tumble in 2003. However, whether Apple can replicate Microsoft’s renaissance remains to be seen.

John Stoltzfus of Oppenheimer has put up a nice chart comparing Apple and Exxon market cap over the last twenty year’s. Exxon Mobil Corporation (NYSE:XOM) has demonstrated gradual and steady growth over the years without major downsides. Apple, on the other hand, started its steady growth in 2009, but sky rocketed in 2012, only to tumble towards the end of the year.

exxon apple

“Over the illustrated time frame, Exxon Mobil Corporation (NYSE:XOM)’s market cap has steadily increased,” wrote Stoltzfus, as quoted by Business Insider. “Apple’s relative market cap grew at exponential 1.30% rates from 2009 with little signs of resistance until its shares started trading above $700 in mid-September 2012,” he added.

Bottom Line

Apple Inc. (NASDAQ:AAPL) has seen its reign as the world’s most valuable company cut short due to its falling stock price. The company’s issued a pessimistic guidance to 1Q13 results. The company’s 4Q12 revenues beat fortune analysts estimates, but its earnings fell short.

Apple Inc. (NASDAQ:AAPL) faces a stiff challenge of cementing its spot as the world’s most valuable company as the market becomes ever competitive. The company’s profitability margins are also under pressure as competitors have taken aggressive price competition strategies to try and gain traction in the market.

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