Google’s parent company, Alphabet just passed Apple as the most valuable company in the world. After Alphabet released its Q4 earnings last night, stock prices shot up 8% causing the company’s combined share classes to reach $554 billion, surpassing Apple’s $534 billion. This is the first time a company has surpassed Apple in four years since Apple vaulted Exxon Mobile in 2012.
Apple broke records with its $75.9 billion Q4 revenue but expects to see its first decline in Q2. Meanwhile, Alphabet reported $21.3 billion in revenue for its 2015 Q4 results with a net income of $3.97 billion. And, according to BGC Financial analyst Colin Gillis, Alphabet is poised to be the first company on a US listed exchange worth $1 trillion. "The core business is cranking along and picking up speed. We love it when businesses re-accelerate," he said.
Apple may have met Q1 expectations, but Alphabet surpassed its Q4 expectations. This is also the first year that Alphabet has reported its earnings by separating Google from “other bets”, which house Alphabet’s longer-term, speculative projects including Nest, Google Fiber, and Verily. While the ‘other bets’ raked in revenue of $448 billion, overall the companies lumped into that category saw a profit loss of $3.6 billion. But that’s okay because the point of these companies is to allow Alphabet to develop new ideas and technologies apart from the Google umbrella.
At its peak, Apple was worth a little more than $760 billion in early 2015. Yet Apple shareholders held their breathe as the Q1 results were released last week. Meanwhile, Alphabet’s strong earnings pushed the stock price during after-hours trading up to $820, which caused Alphabet to surpass Apple. However, Jan Dawson, chief analyst with Jackdaw Research, isn’t convinced Alphabet will keep its lead, “I'd expect this situation to continue to evolve, and it may well be that Apple ends up passing Google again later this year or sometime next year."
Who do you think will come out on top at the close of 2016? Let us know in the comments!
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