Wall Street: Software More Valuable Than Oil

CWmike writes "The tech industry's answer to this week's stock market roller coaster was delivered on Tuesday by the mighty Apple Inc. Apple saw its stock price rise enough — gaining more than 5% — to briefly surpass Exxon Mobil as the most valuable company in the U.S., according to an AP analysis of its market cap. (Exxon Mobile wound up the day slightly ahead of Apple.) Most of the other major tech companies — including Intel, IBM, Dell, Microsoft and Hewlett-Packard — all finished in positive territory yesterday, as markets made up ground lost in the big sell-off on Monday that also hit oil prices and other commodities.Tuesday's rally may be all that's needed to shake away, at least temporarily, some of the economic concerns the IT industry still faces. By closing in on Exxon, Apple effectively affirmed that there are few limits to tech growth. CW blogger Jonny Evans posits that ideas are why Apple beats Exxon on market cap, noting, 'While Exxon drills, hammers and crushes its way to find its billions, Apple's mind-miners explore myriad complexities to develop and understand new technologies.'"

Comments

ridiculous

[JonySuede]

This is ridiculous !

Without oil we have no modern civilization. Even if you could somehow replace all the energy produce from oil, you will still need it for: pharmaceuticals, cosmetics, plastics and others various organics chemicals. The modern world depends on oil even more than it dose on software.

Re:ridiculous

[AK Marc]

What value does Exxon bring that would be lost if they closed tomorrow? Anything? Are they growing as a company, introducing new products that dominate markets? No? Then they are not worth any more than the return on their dividends. Apple has mystique. They could theoretically grow forever. So as an investment, may make more sense, and that's what this indicates, nothing about the value of the products they sell. That's like saying that nobody needs energy because Enron went under.

The hyperbole is ridiculous

[Anonymous Coward]

"Apple's mind-miners explore myriad complexities to develop and understand new technologies."

Apple isn't NASA in the 60's, it's a manufacturer of shiny gadgets. They don't even have a research division.

Apple profits because people are vain, and are willing to accrue massive amounts of debt to buy pretty things.

More important than oil

[Dunbal]

Apple's mind-miners explore myriad complexities to develop and understand new technologies.

"New" technologies? What exactly has Apple invented here, apart from an OS taken from unix, applications written at no cost to Apple because they were done by others, touch screen technology that's been around on PDA's for almost 15 years, etc. Yeah they put it into a good looking package and built a good brand and marketed the crap out of it, but there's nothing exactly "cutting edge" here except for maybe the gross violation of your rights when they make you sign exclusivity contracts with third party cell phone providers.

Now, guess which company is more important. A company that obtains and produces a (relatively) cheap source of energy, or a company that produces a marginally different but very shiny communications/computing device?

Apple is fantastically over-valued and overbought, as anyone holding $400 Apple stock will tell you. I can just imagine the pain of the people who have been stopped out. Well what did you expect when you were buying the stock? Largest market cap != biggest money maker. Amazing revenue growth rates have to make you wonder how sustainable they are over the medium and long term. The bigger they are, the harder they fall. Me, I will cover my shorts at $280 and re-assess.