Update: Apple became the most valuable company Wednesday as its stock closed at $363.69, giving it a market capitalization of $337 billion. Exxon shares fell to $68.03. That means the oil giant now has a market cap of $331 billion.

Tuesday, Apple (AAPL) briefly passed ExxonMobil (XOM) to become the most valuable company in the world. The news sent shockwaves through the financial world: Here was a company that sells high-end discretionary electronics overtaking the consummate king of American industry -- a corporation that reigns over $100 oil and regularly sees more than $10 billion in profits on a quarterly basis.

However, the changing of the guard from Exxon to Apple is part of a larger trend. During the past four years, large technology companies have risen in prominence while other industries like energy and banking have fallen out of favor.

Just look at the 10 largest companies a mere four years ago:

The 10 Most Valuable American Companies in 2007

Company
Market Cap (in millions)
ExxonMobil
$468,714.6
General Electric (GE)
$391,711.3
Microsoft (MSFT)
$269,170.4
AT&T (T)
$237,067.0
Citigroup (C)
$233,804.0
Bank of America (BAC)
$215,611.0
Procter & Gamble (PG)
$205,908.1
Cisco Systems (CSCO)
$190,577.3
Wal-Mart (WMT)
$189,291.4
Chevron (CVX)
$177,827.2
Source: Capital IQ, a division of Standard & Poor's.

That Was Then...

Remember, four years ago was a time of phony banking profits and rising oil prices. Not surprisingly, Exxon was far and away the largest company, while General Electric, Bank of America, and Citigroup all were still riding the housing bubble to record profits.

Of course, as we know now, none of these situations was built to last, and that pedestal quickly crumbled.

...This Is Now

After the crash in housing and an oil price roller-coaster ride, we find today's landscape. Out are the General Electrics, Citigroups, and Bank of Americas of the world. In their place sit Apple, IBM (IBM), and Google (GOOG). Exxon still tenuously holds the top spot (as of yesterday's close), but will likely drop below Apple in coming weeks.

The 10 Most Valuable American Companies Today

Company
Market Cap (in millions)
ExxonMobil
$348,321.9
Apple
$346,741.3
Microsoft
$214,316.0
International Business Machines
$203,755.8
Chevron
$187,078.6
Google
$185,147.1
Berkshire Hathaway (BRK-A) (BRK-B)
$180,364.9
Wal-Mart
$176,475.5
AT&T
$170,965.1
Johnson & Johnson (JNJ)
$170,450.0
Source: Capital IQ, a division of Standard & Poor's.

The shuffling list of super-huge stocks is just that: a list. A more holistic look at the rankings reveals three more practical takeaways for investors:

1. America is still No. 1 in technology: As much as Silicon Valley gets derided for constant bubbles and crazy business ideas, there are few industries in which America is as dominant as technology. The reason for this is simple: Our technology firms are great at creating the underlying platforms on which other technologies are built. That might sound complex, but it's a simple idea. Windows is the basic operating system for computers. Google is the main search engine used by most the world. Apple controls the most profitable operating system for mobile devices.

All these companies hold the most basic building blocks of technology, so it's extremely difficult to come up with new technologies that make them obsolete.

2. If you're afraid of turbulent markets, buy dependable brands: Right now, we're in a market where up and down swings of 5% are common and there's a distinct whiff of panic in the air. If you're looking for safer plays that still have potential to gain if the market runs up, look no further than large companies selling consumer staples.


Companies such as Coca-Cola (KO), Wal-Mart, and even Procter & Gamble aren't flashy names, but all have outperformed the market in the past four shaky years. Unlike other names, such as Exxon or big banks, they're not at the whim of external factors like energy prices or financial markets that can swing wildly. Instead, they sell products that consumers keep scooping up even in tough economic conditions. Best of all, they have established international presences in foreign markets that can keep growing even if the U.S. stagnates. Which leads to a final takeaway from the market-cap shuffle...

3. Growth overseas is good for brands, bad for the domestic jobs outlook: The 2008 recession caused a steep drop-off in jobs and the unemployment rate currently sits at 9.1%. Coming off a record earnings season from corporate America, you might expect that figure to keep dropping in spite of fears of a worsening general economy. Don't count on it.

The problem is that American companies are quickly becoming global companies. More than 50% of earnings growth in the S&P 500 is from abroad. That means while American companies might be posting record earnings, they're pouring resources back into the areas where they're growing, which is outside the United States. That American brands are so enduring abroad and can be so successful in foreign markets is great news for investors, but it's also sour grapes for Americans looking for jobs.

Eric Bleeker is the technology editor for Fool.com. You can follow his Twitter @bleekertech. Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of Coca-Cola, Johnson & Johnson, Microsoft, International Business Machines, Berkshire Hathaway, Wal-Mart Stores, and Google. The Fool owns shares of and has opened a short position on Bank of America.


Increase your money and finance knowledge from home

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Small Cap Investing

Learn now to invest in small companies the right way.

View Course »

Add a Comment

*0 / 3000 Character Maximum

15 Comments

Filter by:
kdt34wqx

Thanks, Jeff.

August 11 2011 at 1:04 PM Report abuse rate up rate down Reply
Ken Lupi

who gives a ****

August 11 2011 at 12:01 PM Report abuse rate up rate down Reply
GrayHatsBeGone

August 11, 2011
ATTN: SEC CHAIRMAN
RE: Bounty Application
Certified Mail # 7009 2820 0002 2072 4823
IBM CEO SAMUEL J. PALMISANO IS $50,000,000 RICHER !!!

www.secform4.com/insider-trading/1180618.htm

THE BIG MAN SOLD HIS IBM STOCK SHARES AT THE TOP, JUST BEFORE THE MARKET COLLAPSE.

DID YOU GET STUCK HOLDING DEVALUED SHARES ?

DID HE KNOW SOMETHING YOU DID NOT KNOW ?

"BIG SAM" NOW RANKS WITH IBM CFO MARK LOUGHRIDGE WITH HIS LUCKY CHARM !!!

The SEC and DOJ should want to know what SAMEUL J. PALMISANO OR HIS BROKER/FINANCIAL ADVISOR knew, and when he knew it, and how he knew it !

Didn't Mr. Palmisano learn anything at all from convict IBM Sr VP Robert "Blabber Mouth" Moffat ???

“…it is entirely appropriate for the SEC to investigate in situations of major unusual market movements, such as the volatile trading on Friday. However, he added that the agency should also look carefully at trading in the week before the Friday downgrade.”

NEWS ARTICLE - Law from 2006 gives SEC scope to probe S&P
Speculation of a downgrade Friday should drive SEC review: onlookers

By Ronald D. Orol (MARKETWATCH AUGUST 9, 2011)

www.marketwatch.com/story/law-from-2006-gives-sec-scope-to-probe-sp-2011-08-09?link=MW_latest_news

UPDATED - www.ibmTheWidowMaker.com
TWITTER - www.twitter.com/madamepjbailey (IBM Widow)
SEC files - SFRO-131956 & HO-1329303

August 11 2011 at 10:46 AM Report abuse rate up rate down Reply
jerri2222

Hey Eric................Bank of America a top 10 US company?....Boy, we are worse off then I thought...what a joke... whose takin you out to lunch or to the club to play golf from the Board ?...or maybe worse

August 11 2011 at 9:48 AM Report abuse rate up rate down Reply
bruce5676

is there something wrong when a toy company is the richest..keep buying apple toys please.hehehe

August 11 2011 at 6:16 AM Report abuse rate up rate down Reply
Phil

Sure, we make a lot of money ... the problem is having to live here.

August 11 2011 at 1:56 AM Report abuse rate up rate down Reply
bassmnsc

Walmart needs to dump Mike Duke and return to the ways if its FOUNDER -SAM WALTON who valued what there associates thought and listened to there associates for good Ideas.Did you know the Idea of a Walmart greeter came from an associate?The corporate big wigs at Walmart are only worried at how big they can say they are and NOT worried about how the associates or customers are treated in the stores-TIME TO GO MIKE DUKE

August 10 2011 at 11:32 PM Report abuse +1 rate up rate down Reply
ivanczar10

AT&T been very very good to me.

August 10 2011 at 8:05 PM Report abuse rate up rate down Reply
Gus

Unfortunately the high tech software giants aren't big at creating jobs. They have several very creative folks who write these brillant programs, but the actual production of all those wonderful cell phones, ipods, lap tops, xboxs, gps's, etc are manufactured in China. Microsoft and GE .Both financial giants, but Microsoft has around 25,000 employees while GE has over 250,000 workers. These new top performing software corporations are great for generating profit for the investors but are of very little help to the country in terms of job creation. America's loss of large manufacturing corporations pretty much ensures the US will have permanent high unemployment for years to come.

August 10 2011 at 7:45 PM Report abuse +1 rate up rate down Reply
mrspelosi

I noticed that the Huffington Puffington hasn't posted much about the Republicans keeping control in Wisconsin. Like I stated before. The American people started voting the country out of debt in November of 2010 by firing me and many other reckless spending democrats. Now they need to finish the job by handing President Obama his walking papers and putting Harry Reid in a retirement home. This is real change that we all can really and truly believe in dears.

August 10 2011 at 6:37 PM Report abuse -2 rate up rate down Reply