Apple is most valuable US company

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The iPad vs. oil: Apple surpasses Exxon as most valuable US company at the market’s close

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FILE – In this March 25, 2011 file photo, customers wait outside the Apple store in Munich before the start of sales of the iPad2. Investors seem to think you want an iPad more than oil, as Apple Inc. became the most valuable company in the United States, surpassing Exxon Mobil Corp. on Wednesday, Aug. 10, 2011.

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Its lineup of sleek phones, computers and iPods, irresistible to customers even in tough economic times, propelled it to the No. 1 position by market value Wednesday, surpassing Exxon Mobil. Apple’s stock on the open market is now worth more than any other company’s.

Apple’s stock fell for the day, but Exxon’s fell more. Apple finished with a market value of $337 billion, beating Exxon’s $331 billion. A single share of Apple stock now costs $363.

Apple occupies a rarefied spot once held by General Electric and Apple’s own rival Microsoft. Exxon had held the top spot since 2005.

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But it’s not just the comeback. Gleacher & Co. analyst Brian Marshall says Apple is giving investors something that has never been seen before. Apple’s numbers are huge, with $30 billion in revenue in the latest quarter, for example. Yet Marshall said the 35-year-old company is “growing like a startup.”

Apple grew its net income 70 percent to $14 billion and its revenue 52 percent to $65 billion in the fiscal year that ended last September. A year earlier, even as other companies — though not Exxon — were reeling from the economic meltdown, Apple’s earnings grew 35 percent and its revenue 14 percent.

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Still, Apple commands just a sliver of the overall smartphone and computer market. For that reason, Apple can grow at such a fast pace. “They have just a tremendous runway in front of them,” Marshall said.

Exxon, which set a record in 2008 for the highest quarterly earnings by any company, will find it hard to compete with Apple’s growth because its prospects are tethered to oil prices and new oil discovery.

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.

In its latest quarterly report, Apple said stronger iPhone and iPad sales helped more than double its net income to $7.3 billion and grow revenue by 82 percent to $29 billion.

Exxon Mobil, meanwhile, posted a 41 percent increase in its second-quarter earnings to nearly $11 billion, the largest since it set a record of nearly $15 billion in the third quarter of 2008. Its revenue grew 36 percent to $125 billion.

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Apple’s ascendance to the top spot is a sign of the times. Howard Silverblatt, senior index analyst at Standard & Poor’s, says the most valued company in the U.S. often reflects the demands of consumers. They also tend to have products that are unmatched by their rivals.

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The top companies “tell us something about society, not just the market,” Silverblatt said.

But, as history has shown, those companies can easily lose out to rivals if they don’t keep coming out with products that appeal to consumers.

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Apple generally introduces a new product every three years, which means something new in 2013. Marshall does not expect the company to slow down any time soon.

In fact, he expects Apple to pass yet another milestone next year, when it’s likely to surpass Hewlett-Packard Co. as the world’s largest technology company by revenue. In the most recent quarter, HP reported $31.6 billion in revenue, compared with Apple’s $28.6 billion in its latest quarter.