Yesterday for a brief moment Apple surpassed Exxon as the most valuable company, but Exxon ultimately won the day, finishing a smidgen above Apple, as we reported. Today Apple ended the day with a market cap of $337.2 billion; Exxon ended with a market cap of $330.8 billion. As the Dow continued to drop, Exxon's market cap slipped while Apple's rose just enough to finish above Exxon's, as Business Insider's Jay Yarow and Kamelia Angelova report.
It's an incredible feat considering Apple was a broken company 15 years ago. In the world of technology, which evolves so rapidly, only a handful of companies have been able to reverse course and find new life.
Apple's rise to the top happened rather suddenly. Just a year ago it passed Microsoft to become the biggest company in tech. At the start of the year it was still $75 billion behind Exxon.
But what are the implications of the Cupertino tech company having more value than the dominant oil company? A couple themes we've seen:
People need their Apple gadgets. "Investors seem to think you want an iPad more than oil," explains The Associated Press's Barbara Ortutay. Apple has created products that people are willing to spend money on, even as the economy tanks and they have to forgo other luxuries, argues Ortutay. "People want their gadgets, especially those made by Apple, even in a recession and even as they watch their stock portfolios and retirement funds shrink." Apple has huge numbers, with nearly $30 billion in revenue last quarter. Investors like that, explains Ortutay.
"This isn’t big business tech," Michael Gartenberg, a technology analyst for Gartner, a research and consulting firm, told The Washington Post's Hayley Tsukayama."These are products sold one at a time to consumers. This shows the power of consumer technology, how it has been adopted and how Apple has changed how consumers do everything."
Innovation has more value than oil. Exxon has held the top spot for six-years. But unlike Apple, Exxon has limited growth opportunities because it relies on a limited resource, explains Computer World's Johnny Evans. "Because while Exxon's main business is essentially found in peddling the world's slowly-shrinking crop of fossil fuels, Apple makes its fortune selling the one resource the world has plenty of: ideas." Ideas are a seemingly unlimited resource that investors don't see running dry any time soon, argues Ortutay. "Apple's growth is limited only by innovation. Investors expect it to grow as long as it keeps making products that people want. So investors are betting on Apple's stock even though it currently makes less money than Exxon."
And this is just the beginning for Apple, believes MarketBeat's Mark Gongloff. "Yesterday’s market-cap cross was just a blip--this one is lasting a little longer. We should probably get used to it." And there's still room for expansion: "Apple commands just a sliver of the overall smartphone and computer market. For that reason, Apple can grow at such a fast pace," explains Ortutay. "They have just a tremendous runway in front of them," says Gleacher & Co. analyst Brian Marshall to Ortutay.
But can Apple hold onto the title? Apple has seen a very quick rise to fame, the Associated Press points out, only surpassing Microsoft for the number two spot in May 2010. "But given the capriciousness of markets, the other main point of interest is that Exxon has managed to hold the top position, with brief interruptions, for so long." explains the Financial Times' Andrew Hill: "the real measure of its claim to market fame will not be the speed of its ascent but whether it can replicate Exxon’s endurance at or near the top of the world’s most volatile voting system."