Apple Is No Longer The Most Valuable Public Company On Earth, And That’s Ok [Opinion]


Is Apple to blame for its sliding stock?
Is Apple to blame for its sliding stock?

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.

  • Barry_Dwyer_

    The stock is over-inflated by the same idiots on Wall St. who wheel out those pie-in-the-sky predictions for forthcoming Apple products. The recent “slash in iPhone 5 screen orders” story that emerged, I believe was definitely amplified by people on Wall Street with an interest in dropping the stock price.

    They sold more iPhones than ever last quarter – but just not as much an arbitrary figure the stockbrokers decided they had to sell. Because these former-blackberry wielding, rolex wearing, frat-boys would really know more about the future of technology than anyone in Silicone Valley – or Apple for that matter.

    If Apple were constantly worrying about how to fluff their share price they’d never have the courage to try something new and shake up or enter any new markets.

    “If I’d asked my customers what they wanted – they’d have asked me for a faster horse”.

  • Mike Muyal

    Amen, Barry. Well said.

  • Koban4max

    at the end of the day: to buy the products or not to buy the products…that is the question.

  • iSteve

    WSJ sucks….

    As Steve said “Market capitalization is not what makes customers buy our products”. So again WSJ sucks….

  • Robert X

    I actually think that is a better position for them to be in.

  • Steffen Jobbs

    Not only is Apple worth less than Exxon, but by Wall Street standards, Apple is already worth less than Amazon, Netflix, Priceline, Dell, Cisco, Oracle, Microsoft or any number of tech companies you could care to name. Apple is worth no more than what the hedge funds say Apple is worth and they say Apple is practically worthless. No investor wants to buy a stock that has been blacklisted by the hedge funds no matter how much money the company is making. Apple is now considered toxic and it will remain so until the hedge funds say otherwise.

    The news media is certain that everyone wants smartphones with 5″ displays and Apple is a backwards-thinking company for producing smartphones with smaller displays. So, now in just one quarter, Samsung has become the smartphone King and Apple has become, well, just a laughable court jester. Wall Street has already stated the Samsung smartphone design team has made Jony Ive look like a toddler with Lego’s. They know for a fact that the Samsung Galaxy S4 will make the iPhone seem like it’s two years behind the times and cost half as much.