State oil producer Saudi Aramco this week usurped Apple Inc (NASDAQ:AAPL) to become the world's most valuable company, to say it's a sign of the times is hyperbole nevertheless it does speak to the trends of recent months.
It reflects soaring oil and gas prices, driven higher by Russia's war in Ukraine, as well as a more fearful outlook for discretionary consumer spending, along with the unwinding of lofty premiums in the tech sector.
Indeed, technology stocks have taken the brunt of the stock market battering in 2022 to date, and blue-chip tech stocks like Apple have been stripped down as investors took cash off the table.
ESG may have posed existential questions of the hydrocarbon industry but the geopolitical events of this year remind everybody of petroleum's necessity. Given that it doubled net income to US$110bn in 2021, and oil prices are now higher still, it's probably no surprise that the Saudi firm, which floated shares for the first time in 2019 is in the bright spotlight.
Apple, meanwhile, has been suffering from supply chain woes during the pandemic with chip shortages and other constraints that ramped up production costs and slashed sales, which often is enough for investors to pull the plug.
Elsewhere Elon Musk can't spend more than a couple of hours without one of his famous companies making headlines, and, the spike in stock market volatility shook up valuations.
Tech stocks are languishing at best, collapsing at worst. And the lack of a retail investing mob means there's less support than the sector has recently enjoyed.
“It’s a factor that people are not talking about enough,” Bowersock Hill said, before adding: “A lot of buyers have decided to sit out of the market for a while.”
Consumer spending has returned to the real world, from lockdown enforced digital streams, meanwhile, Russia's invasion of Ukraine has seen investor sentiments move more in favour of traditional defensive plays rather than 'big tech'.
During the pandemic, some 25% of stocks were traded by retail investors, roughly half of which appear to be on the sidelines or have exited the market altogether.
How have the six biggest stocks performed?
Apple was the first company to hit a US$3tn valuation in January but its shares have sunk over 20% since. It is now worth closer to US$2.37tn after troughing 5% on Wednesday to see its lowest level for six months.
It meant that Aramco was formally, in market cap terms, the world's most valuable company. The Saudi oil firm, which has shares listed in Riyadh, has seen its shares soar 27% this year, thanks to record oil price rises.
Microsoft Corp, which remained the third most valuable company at US$1.95tn, according to Companies Market Cap, has fallen 7.6% in the last month to date and 23% in the last six.
Google’s parent Alphabet Inc (NASDAQ:GOOG), which is another tech stock, has experienced similar shedding of value, having given up 11% in a month and 24% in the past half-year.
Amazon.com, Inc, which just about remained a trillion-dollar company at US$1.07tn, has nosedived 30% in the last month and 40% in six.
Tesla Inc (NASDAQ:TSLA), which was the sixth company worth US$1tn until December 2021, gave up 26% in the past month to date.
Despite the sector's downfall of late, Aramco remained the only non-tech business of the six most valuable companies across the globe.