Alphabet (Google) Overtakes Apple As World’s Most Valuable Company
By Burt Carey
After-hours trading pushed Alphabet shares 6 percent higher than their close on Monday, elevating Google’s parent company past Apple to become the world’s most valuable corporation.
Alphabet’s market cap reached $547.1 billion shortly after the opening bell Tuesday, surpassing Apple’s cap of $529.3 billion. Other stock market heavyweights include Microsoft ($425.7 billion), Facebook ($326.2 billion and Exxon Mobil ($310.1 billion). Together those companies make up the five most valuable corporations in the world.
It was Alphabet’s first reporting under a name other than Google, which is part of a corporate restructuring that began last summer. The last time Google occupied the top spot was in 2010, the end of a three-year period when it kept swapping the top spot with Apple. Apple’s rise to the top came on the heels of strong iPhone and iPad performance earlier in the decade, when its value rose to more than $680 billion in the third quarter of 2012. It surpassed Exxon Mobil to become the most valuable company in 2011.
While Apple’s iPhone business has flattened, Alphabet’s strength among investors comes from growth in its advertising business and promising technological advances in self-driving cars and artificial intelligence. The last time Alphabet’s value surpassed that of Apple was in February 2010, when Apple’s biggest product on the market was its MacIntosh computer.
Alphabet’s stock gained 44 percent since July 2015 while Apple declined 16 percent. The industry watchdog eMarketer reports that Google is set to capture as much as 32 percent of the mobile advertising market this year. Facebook is next closest at 20 percent.
In reporting its numbers this week, Alphabet earned $8.67 per share, beating expectations of $8.09 per share, on revenues of $21.32 billion. The company’s reported expectation was $20.76 billion. Those numbers easily surpassed revenue ($18.1 billion) and share earnings ($6.88) from a year ago.
Alphabet Chief Financial Officer Ruth Porat said strong growth in its mobile search function and in YouTube advertising were key to the company’s rising portfolio.
Apple’s loss in valuation comes as the economies in emerging markets have begun to cool, allowing the company’s iPhone business to grow by just 1 percent this year. Its iPhone business makes up two-thirds of the corporation’s overall revenue, but its failure to bring new products to the market to boost sales where the iPad and Mac lines have fallen has left investors less than impressed.
Alphabet Class A shares were trading at $810 after Monday’s close.