Apple guns for Exxon as king of stocks
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Apple Inc is within sight of catching up with Exxon Mobil as the most valuable company in the world.
Based on Apple's growth trajectory, and a number of catalysts in the pipeline -- from a possible new iPhone this fall to expansions in China -- investors and analysts say Apple could unseat Exxon in the next six months, or latest by the middle of next year.
The market value of the top US technology company was only $52 billion short of Exxon's $410 billion on Wednesday, even though the largest of the oil majors rakes in more than four times Apple's annual revenue.
In the past month alone, Apple's market capitalisation has risen by $66 billion to $357.8 billion, fueled by optimism of a monstrous second half that could include the iPhone 5 and the new online music and data storage service called iCloud.
Apple has the business momentum and the growth to become the largest capitalized company in the US said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. It's certainly headed in that direction. It almost seems inevitable.
The only hitch to the ascent of Apple shares would be Exxon increasing its growth on the back on higher crude oil prices, which is unlikely, Ghriskey said.
Assuming that Exxon shares stay flat, Apple will become the most valuable US company when the stock hits about $444, which is only about 15 per cent away from current levels.
Exxon shares have risen 14 percent so far this year, outperforming its peers. Gains have largely been fueled by high crude prices and improving demand for gasoline and diesel in developing countries.
Analysts on average expect shares of Exxon, which last paid a quarterly dividend of 47 cents in June, to climb about 12 percent in the next year to $93. This could increase its market value to $458 billion.