Apple gives up title of most valuable
Apple’s 12-month reign as the No. 1 stock ended after the shares slumped 17 percent this year, worse than any other companies in the benchmark gauge for U.S. equities. The decline reduced its market capitalization to $413 billion, below Exxon Mobil’s $418 billion.
The switch in rankings reflected fading confidence in Apple, whose 15 years of transformation from a near-bankrupt personal-computer maker to a technology leader dominating the smartphone and tablet market helped it become the most valuable U.S. company ever in 2012. Apple shares have fallen by 37 percent from a record in September amid concern that mounting costs and competition may curtail growth.
“You have one company that had pretty high expectations for it for the future and you have Exxon that continues to chip away slow and steady,” Jason Cooper, who helps oversee $2.5 billion in South Bend, Indiana, at 1st Source Investment Advisors, said in a phone interview. His firm owns both Apple and Exxon shares. “People are coming to the realization that Apple is losing a little bit of gloss and shine.”
About $245 billion has been erased from Apple’s value since the Cupertino, California-based company rose to an all-time high in September. Even as Chief Executive Officer Tim Cook guided Apple to record iPad and iPhone sales, investors worry about management’s ability to keep producing hit products more than a year after the death of co-founder Steve Jobs.
Samsung Electronics and others have followed Apple’s lead into the era of mobile touch-screen devices and are grabbing market share by introducing smartphones in various designs and prices.
Apple sank 12 percent yesterday after posting the slowest quarterly profit growth since 2003. Earnings will continue to worsen in the current quarter, with analysts projecting a 14 percent drop, according to estimates compiled by Bloomberg.
“There was little room for imperfection,” Mark Moskowitz, an analyst at JPMorgan Chase in San Francisco, said in a phone interview. “Investors jumped into the parade alongside growth in tech. They forgot that Apple is taking on a herculean effort.”
Exxon Mobil regained its No. 1 rank, which the Irving, Texas-based company had kept in four out of the six years through 2011, data compiled by Bloomberg show. The stock is up almost 6 percent this year as profit is forecast to rebound from three quarters of declines.
Apple may reclaim its top spot if analysts’ price estimates come true.
Shares of Apple will climb to $627.79 over the next 12 months, implying a market value of about $589.5 billion, according to analyst projections compiled by Bloomberg.