Apple May Surpass Exxon as Most Valuable Company
Apple could be on its way to top Exxon Mobil Corp. as the largest company by market capitalization. If this happens it means that Apple will take over the top spot in the Standard and Poor’s 500, the market index used by most professional money managers. Hard to believe that Apple has done so well in the past decade and it just goes to show you that you can’t ever count an underdog out!
If Apple becomes more valuable than Exxon, it will be only the second time that a growing technology company which doesn’t pay dividends will make up the greatest share of the S&P 500. The first, Microsoft Corp., held the position for two years in the late 1990s during the boom that made personal computers a staple in households around the world. Today, Apple dominates the business of putting the Internet in your pocket. That’s quite a feat for a company that was worth only $7 dollars a share 10 years ago. It closed Friday at $282.52. Apple still has some catching up to do before it takes the lead, of course. As of now, there is a $60 billion difference in the two companies’ market capitalization. If the price of Exxon stays flat, Apple’s stock will need to rise 12 percent to move ahead of the oil giant, according to Brian Marshall, an analyst at Gleacher & Company. Exxon doesn’t seem likely to surge ahead in value anytime soon, according to research by Morgan Stanley analyst Evan Calio. Exxon “will likely lag in a continued recovery, particularly one driven by oil rather than gas,” Calio recently wrote in a note to clients. For most companies, a 12 percent jump in a year would be fantastic, let alone in a few months. But Apple has proven that it’s not a normal company. In May, it leapfrogged ahead of Microsoft to take the No. 2 spot on the S&P 500 list. Gleacher’s Marshall expects Apple to pull off a similar feat with Exxon not long after it reports its earnings on Oct. 18.
Comments are closed.