One of the biggest news in finance this week was learning how Google’s parent company, Alphabet, is now the world’s most valuable business. They were able surpass Apple, their long time high-tech competitor as the top company. Alphabet’s shares rose by six percent after they finally unveiled their estimated fourth quarter earnings result, with their combined share classes at a value of over $554 billion.
They were able to pass Apple successfully by an additional $20 billion. Collin Gillis, a BGC Financial analyst, stated that “Google is not in the pole position.” He gave credit to accelerating revenue growth, expense control and a capital return to Alphabet’s growth.
As of today, Alphabet is now position as the first company in American to have reached a worth of $1 trillion. Gillis went on to add that the core business is picking the speed up while cracking alone. He also left a comment that mentioned their company loves it whenever businesses get the chance to keep growing.
Originally, it was Apple who stayed at the top for several years while taking all the limelight. They were even told to be the most the most valuable company that operates in America. At some point in time during 2015, the company was valued at over $760 million. It makes sense that Alphabet took the top position as Apple was seen struggling as the demand for their popular iPhone fell. The tech company hasn’t released any plans to release new products. Apple is moving forward with mobile advertising and videos which also causes its stock to surge.
During the fourth quarter, Alphabet made $8.67 per share in the fourth quarter, which ended up being well above the projected amount of $8.09. Their revenue reached up to $1.32 billion which also beat the projected $20.76 billion. Ruth Porat, Chief Financial Officer, believed that the cause of its rise and strength was due to their massive growth in mobile search and their ongoing momentum they have with Youtube (a company they bought out and currently own) advertising.
In the past year, Alphabet made the move separate itself from Google. Alphabet itself has different projects that are in the works such as rapid fast broadband provider Fiber and gadget maker Nest. The company mentioned that their “other bets” category earned them a total of $448 billion in revenue while they lost $3.6 billion.
Plenty of investors have and are warming up to Apple’s newly updated terms on charges. Still, a warning was given to Wall Street that investors should still invest in the popular tech giant to prevent “incrementalism” which can lead to irrelevance over a span of time. Jaw Dawson, chief analyst of Jackdaw Research, stated that Alphabet having a “one up” against Apple is nothing more than a symbolic one and possibly temporary. He believes that Apple stocks had to fall for them to rise. Dawson says that Apple is going through a period where their revenues are taking a temporary dip, but they won’t stay there for long. He expected that the situation will not only change, but that Apple winds up passing Google again sometime this or the following year.
With the iPhone experiencing a waning period, could it be that Apple will start to branch into other markets while Alphabet remains blissful and content with their current standing? It’s highly unlikely, especially with Alphabet betting on more technological advances such as wearables, artificial intelligence, driverless cars, and virtual reality. Apple will likely be focusing on Project Titan, their Byzantine car project, which may not come to fruition until several years from now, according to published reports. Nevertheless, the company is focusing on the Apple Watch. Only time will tell which tech giant will reign supreme.