Just as the leaves started to turn in late September, Apple (NASDAQ: AAPL) was a $625 billion enterprise – worth more than any other company on the planet by more than $200 billion.
What a difference four months makes.
Yesterday’s disappointing earnings report sent Apple shares plummeting more than 12% today, driving the stock down to a 52-week low of $450 a share. The company currently has a market cap of $424 billion. That’s right – Apple has lost almost one-third of its value in four months.
Another day or two of this, and Apple will no longer be able to claim status as the most valuable company in the world.
Exxon (NYSE: XOM) – the company Apple overtook around this time last year – is tantalizingly close to reclaiming the market-cap throne after rallying 7% since late December. Exxon currently boasts a valuation of $416.5 billion.
Exxon started the day trailing Apple by $70 billion in value. Now the gap is less than $8 billion.
To be fair, unlike Apple, Exxon has yet to report earnings this quarter. It won’t do so until February 1. If its earnings disappoint the way Apple’s did, the stock will surely absorb a comparable hit.
But the point is that Apple’s recent fall from grace reveals an important investing lesson: that no company, no matter how big or how profitable, is immune to slumps.
Four months ago, Apple stock was worth $700 and the company could do no wrong. Now it’s basically no bigger than Exxon.