Alphabet, Google’s parent company, pipped Apple to become the world’s most valuable company on Tuesday, ending the iPhone company’s four-year reign.
Alphabet’s shares rose by 4.7% by noon on Tuesday following the release of better than expected results. After the rise Alphabet was valued at $548bn to Apple’s $534bn.
Apple’s share price bounced back by the end of the day to put it in the lead again. But while the race between the two tech titans is close at present, analysts are predicting Alphabet will soon take the lead again. Deutsche Bank raised its 12-month share price target for Alphabet to $1,080, 40% above Alphabet’s closing price on Monday.
“We think the current re-rating in GOOGL shares is 2/3rds of the way complete and is likely to grind to $1000+,” said Deutsche Bank analyst Ross Sandler in a note to clients.
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| Google’s Alphabet overtakes Apple as world’s most valuable company |
The European commission is investigating complaints that “sweetheart” deals with the UK allowed the company to pay a pittance in taxes. US Treasury official Robert Stack accused his EU counterparts of unfairly targeting US companies in its tax investigations.
The rise in Alphabet’s share price came after its decision to give investors a clearer picture of its businesses. Google renamed itself Alphabet last August to better reflect the array of businesses it controls.
Most famous for its core search engine, YouTube and Android mobile operating system, Alphabet also invests in a series of “moon shot” enterprises, betting on new technologies including robot cars, biotechnology, health and high-speed internet fibre networks.
On Monday evening the company gave investors the clearest picture yet of how much is being spent on its long-term bets and how much is made by its core business.
The core Google businesses had revenues of $74.5bn in 2015 and it made a profit of $23.4bn – more than $66.5m a day. The “other bets” category had revenues of $448m and lost $3.6bn.
Apple overtook Exxon Mobil to become the most valuable company in the US in 2012, another milestone for the company that was resurrected from near collapse after the return of co-founder Steve Jobs in 1997.
Apple remains hugely successful. It posted the biggest quarterly profit in history – $18bn – for the last three months of 2015. But its share price has sagged as demand for the iPhone has softened.
At its high point in 2015 Apple was valued at $760bn, but its share price has fallen close to 20% over the last year amid concerns that the tech giant has yet to come up with another blockbuster product. The Guardian
