Value Shock: Apple Larger Than Wal-Mart; Microsoft Next Target (AAPL, WMT, XOM, MSFT, GE)

Apple Inc. (NASDAQ: AAPL) is all over the news.  It has the much anticipated iPad launch and now it has a new iPhone coming that will run on the CDMA network sold through Verizon.  And Apple keeps putting in new 52-week highs and new all-time highs each day.  Apple has only had one down day in the last seven trading sessions.  But something has happened today on our own 24/7 Wall Street Real-Time 500 showing the 500 largest US companies by market cap…  Apple is now the third largest company in America by market cap.  More importantly, today it just overtook Wal-Mart Stores, Inc. (NYSE: WMT) for the #3 position.  At $236.86, the market cap of Apple is roughly $214.75 billion, compared with Wal-Mart at $55.95 billion with a $212.9 billion market cap.

Today’s news (or price action) may not have any implications for Exxon Mobil Corp. (NYSE: XOM) as our dominant #1 of the Real-Time 500, but it does have implications for Microsoft Corporation (NASDAQ: MSFT) as our #2 company by market capitalization.  Despite the recovery and movement up in the Real-Time 500 by General Electric Co. (NYSE: GE), GE is still in Apple’s dust trail when it comes to market capitalization rates.

There are many ways to look at this.  In revenues, it is not even close.  Thomson Reuters has estimates of more than $428 billion in revenue for the fiscal Jan-2011 estimates for Wal-Mart versus about $54+ billion for the fiscal Sept-2010 for Apple.  Revenue is not an apples-to-apples comparison because of the margins and sectors, no pun intended.

On an enterprise value including debt, Wal-Mart still maintains the lead over Apple because its has over $36 billion in long-term debt versus only about $5 billion for Apple, and Apple’s longer-term liabilities are not even real debt issuance.

Apple will have a hard time ever reaching the #1 company by market cap status in the U.S.  That position is held by ExxonMobil Corp. (NYSE: XOM) because its market cap is $317 billion, and that is with shares closer to a 52-week low rather than an all-time high.  If ExxonMobil gets back above $90 to its old all-time high, that would be a market cap of roughly $425 billion.

There is one challenge and one that the Apple lovers would absolutely love.  Microsoft Corporation (NASDAQ: MSFT) sits with a market cap just shy of $260 billion.  Apple “only” has to rally about 21% and Microsoft has to stay static for there to be a real war of the market caps on top of a real war for the consumer electronics and computer spending.

General Electric Co. (NYSE: GE) is back to #5 on the Real-Time 500 with the value of its common stock close to $196 billion.  On a fully diluted basis, that is higher; and on an enterprise basis it is a considerably different measurement.

Does market cap alone matter?  It depends on your stance of valuation versus dollar inflows needed to drive a stock higher.  Stay tuned.

JON C. OGG