Apple's Plunge Compared to Exxon Mobil & Microsoft

Posted by Bigtrends on January 25, 2013 12:52 AM

Apple's Plunge Compared to Exxon Mobil & Microsoft

Slow and Steady Wins the Race?  Exxon Mobil (XOM) Catching Back Up With Apple (AAPL)

Apple (AAPL) declined $63.51 Thursday, or 12.35%.  This translates into a loss of $65.8 billion in market cap.  To put this loss into perspective, there are 459 companies in the S&P 500 Index (SPX) (SPY) that have a market cap less than $65.8 billion, and the 130 smallest stocks in the S&P 500 have a combined market cap that is less than what Apple lost today.  Since Apple's market cap peaked at $658 billion on September 19th of last year, the company has lost $235 billion in market cap.  There are only three stocks in the S&P 500 that have a market cap greater than what Apple has lost over the last four months Exxon Mobil (XOM), Google (GOOG), and Berkshire Hathaway (BRK/a).  Pretty astounding.

In early 2012, Apple eclipsed Exxon Mobil in size to become the biggest company in the world.  By late 2012, Apple was worth more than $200 billion than Exxon.  How quickly things have changed.  After today's decline, Apple is now worth $423 billion, which is just $6.5 billion more than Exxon Mobil.  If Apple declines another 1.55% (with XOM staying where it is now), Exxon will once again be the biggest stock in the world.  This is where the tortoise catches up with the hare.

AAPL vs XOM Market Cap

AAPL vs XOM Market Cap Spread

Is Apple (AAPL) Taking the Microsoft (MSFT) Path?

Apple (AAPL) was down heavily after reporting earnings this week.  Adding in this big gap and down day on Thursday, Apple will be down 35% from its closing high of $702.10 reached on September 19th of last year.

Apple's action over the last year harkens back to another big Tech stock's action in the late 1990s -- Microsoft (MSFT).  In 1999 during the height of the Internet bubble, Microsoft (MSFT) also became the biggest company in the world, but it didn't hold onto the title for long.  Following its peak on 12/28/99, MSFT fell nearly the exact same amount over the same period of time that Apple has fallen since it peaked in September.

In the first chart below, we compare MSFT's price action from December 1997 through December 2000 to AAPL's price action from September 2010 to present.  The chart is set up so that the peaks in price for each stock are reached on the same day.  As shown, if AAPL continues to trade like MSFT did, the stock is not even close to a bottom.  In the second chart below, we show the percentage drop from each stock's peak in price.  Within 106 trading days from its peak in late 1999, MSFT was down 48%, and it took 194 trading days for MSFT to fall 50%.  Apple is currently 85 trading days removed from its all-time high.

AAPL vs MSFT Chart

AAPL vs MSFT % Change

Courtesy of