It’s hard to forget the day that Apple surpassed Exxon Mobil to become the most valuable publicly traded company in the world. But a lot has happened to Apple’s stock since August of 2011. AAPL has ridden a chaotic roller coaster on the stock market. After announcing a record holiday quarter Wednesday with $54.5 billion in revenue and $13.1 billion in profits, AAPL dropped more than 10%. That’s more than $50 billion in market cap gone in a day. Poof.
Apple’s stock isn’t doing so hot, and after over a year in second place, today marks the day that Exxon Mobil dethroned Apple on Wall Street.
And that’s ok. This doesn’t mean that the company is doomed.
Apple’s market capitalization closed at $413 billion today on the NASDAQ, while Exxon closed at $418 billion. AAPL is hovering around $440 after hours. It’s been a tumultuous decline for Apple since AAPL traded at over $700 per share in September of 2012.
But why the slow spiral over the last 4-5 months? Apple has had its share of fiascos and shakeups, but nothing to signal the end of a dynasty. The “Steve Jobs would have never!” argument will probably never die, but let’s be honest here; Tim Cook hasn’t been steering Apple much differently than Jobs would have been.
A lot of it is outside of Apple’s control. During the earnings call earlier this week, Cook and Apple CFO Peter Oppenheimer kept blaming the supply chain overseas. Apple couldn’t make enough iPad minis to meet demand last quarter, hence the delayed shipping times. Supply constraints for the new iMac really hurt overall Mac sales. The iPhone’s sales aren’t going to be able to really explode internationally until Apple can get prices down in emerging markets and strike a deal with the largest carrier in the world, China Mobile (which is something that’s rumored to happen soon).
And Wall Street analysts hold Apple’s performance to crazy high standards. When you have a company that has grown at the insane rate Apple has over the last decade, you start to have unrealistic expectations. Apple’s growth has started to plateau, but that doesn’t mean that the company is faltering. Sales are still up across the board. Now Tim Cook finally has some room to breathe and prove himself as the new CEO.
Don’t let the value of Apple’s stock determine the overall health of the company. It’s an important factor, but not the only litmus test. When Apple stops making great products and setting record sales, then you should start worrying. So far, still good..