Oil-producing company Saudi Aramco uncrowned technology firm Apple Inc on Thursday as the world’s most valuable company in terms of market capitalization (M-cap), according to a report by AFP. 

The dethroning comes after skyrocketing inflation in the past few weeks that resulted in a fall in tech stocks, including Apple’s. 

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 As trading closed on Wednesday, the oil-producing company was valued at $2.72 trillion, whereas Apple was valued at $2.37 trillion, according to market data.

Here are 5 reasons why Saudi Aramco surpassed Apple

1. Inflation

Inflation figures all across the globe have been witnessing a massive spike, especially in the United States, where the rate of inflation has reached the highest figure in four decades. This has resulted in a decrease in demand for tech stocks.

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2. Oil prices 

With high oil prices, profits of Saudi Aramco have leaped 124% compared to last year. The spike in oil prices is a consequence of the ongoing Russia-Ukraine conflict.

3. Labour costs

The high demand for work from home (WFH) in several companies all across the world has caused a hike in operating and labour costs.

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4. Attrition rates

Since the COVID-19 pandemic, rates of attrition in companies have been on a rise. In order to retain workers, companies have been forced to alter and modify their policies which have further increased operating costs.

5. The Chinese lockdown

China’s biggest cities like Shanghai and Beijing have been placed under stringent lockdown due to the recent COVID-19 outbreak. This has affected Apple, which manufactures an array of its products in the country. Apple previously said that the restrictions in China could result in more strain on chains of supply and can impact June’s quarter results by $4-$8 billion.