Alphabet Passes Apple Market Capitalization by 3% as the World’s Most Valuable Company

Alphabet Passes Apple Market Capitalization by 3% as the World’s Most Valuable Company

The Owners of Google, Alphabet passes Apple market capitalization at the open Shares of Alphabet which opened nearly 3 percent (3%) higher Tuesday, pushing the technology giant’s market capitalization past Apple to become the world’s most valuable public company.
Alphabet has a market cap of $547.1 billion, higher than Apple’s $529.3 billion as of 9:45 a.m. ET.

Apple’s massive market cap is still trailed by Microsoft($425.7 billion), Facebook($326.2 billion) and Exxon Mobil($310.1 billion) to round out the list of the world’s five biggest companies.
Alphabet was already set to take the title Monday night, before sealing the deal Tuesday morning. At Monday’s after-hours levels (which technically reflect an indication, but not the real-world value), Alphabet’s market cap hit roughly $570 billion, eclipsing Apple’s market cap of about $535 billion. Shares of Apple opened Tuesday down nearly 1 percent.
Market cap: Apple vs. Alphabet (USD, million)

The last time Google was more valuable than Apple was in February 2010, when both companies were worth less than $200 billion. At the time, Apple had yet to release its first iPad, the newest iPhone on the market was the 3GS, and the Mac was the company’s biggest product line, accounting for one-third of revenue. Steve Jobs was still at the helm.

Google was being guided by Eric Schmidt, who would hand control back to co-founder Larry Page the following year. The company was a little more than half its current size.

Apple and Google actually flip-flopped multiple times between 2008 and early 2010, before Apple went on a historic tear, jumping from $180 billion in value to over $650 billion in September 2012. At that point, the two companies were separated by over $400 billion. In 2011, Apple passed Exxon to become the world’s most valuable company.

Alphabet Passes Apple Market Capitalization by 3% as the World’s Most Valuable Company

Alphabet Passes Apple Market Capitalization by 3% as the World’s Most Valuable Company

Questions Now Arise:

  1. Are multinationals starting to lose the tax battle?

  2. Is Apple really as cheap as it looks?

Answers that follows…

It’s hard to believe that Google was the more valuable company from the time of its IPO in 2004 until April 2008. Then iPhone madness began.

Google’s latest rise versus Apple began in July. From that point through the end of 2015, its shares soared 44 percent, while Apple’s sank 16 percent.

Apple’s main problem is its reliance on the iPhone, which now accounts for two-thirds of revenue. It’s a massive business, but sales in the fiscal first quarter increased only 1 percent from a year earlier, while iPad and Mac revenue dropped. Investors are concerned that unless Apple changes course and decides to compete with lower cost Android manufacturers on price, the iPhone’s best days are in the past.

Meanwhile, Google is convincing investors that in the transition from Web to mobile it will maintain its dominance. According to eMarketer, Google is poised to capture 32 percent of the mobile ad market this year and next, staying well ahead of Facebook, which is around 20 percent. The company generates so much profit from its digital ad business that it can invest in all sorts of potential growth areas, namely autonomous driving and extending life.

Wall Street seems to be as happy with Alphabet (and Google’s) earnings as it was recently unhappy with Apple’s. Minutes after Alphabet posted its most recent quarterly earnings, after-hours trading pushed the company’s stock price up enough to make it the most valuable company in the world, with a market cap of about $570 billion vs Apple’s $539 (or so) billion.

Whether or not that will hold into the opening price during regular trading is an entirely different story — stock prices move around a lot during times like these.

Even so, as CBNC notes, this is the first time since 2010 that Google (well, Alphabet) has been worth more as a company than Apple. It might be temporary and as far as actual consumers are concerned, it’s little more than bragging rights. But it’s a moment for Alphabet, one worth noting.

The stock jump came even though Wall Street now has an entirely new section of red ink it needs to stare at inside the quarter earnings report from the search giant: the “Other Bets” that come out of Alphabet’s non-Google divisions. The loss for those bets totaled about $3.5 billion for 2015 — but the company made $23 billion or so in profit for the same period, which apparently takes the sting out of it.

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