Google parent Alphabet surpasses Apple as 'world's most valuable company'


With the release of its fourth-quarter earnings report today, Google parent company Alphabet became the world's most valuable company, and kicked Apple out of that coveted spot.

Alphabet's report was divided in two segments: One for its core business, another for its eclectic assortment of experimental, higher-risk ventures. The company racked up $3.6 billion in losses last year, through "moonshots" like self-driving cars and Internet service balloons. But that's just what ambitious R&D budgets look like, folks.

Students used Google Cardboard virtual reality viewers to “tour” Canada’s Parliament at an event in January, 2015. Photo: Reuters

Students used Google Cardboard virtual reality viewers to “tour” Canada’s Parliament at an event in January, 2015. Photo: Reuters

As Re/Code put it, the report showed Wall Street what Wall Street really wanted to see: “Google’s business is doing fine.” Snip:

Google altogether beat expectations, reporting net revenue, minus partner site payout, of $17.3 billion on $8.67 earnings per share. Wall Street was looking for something around $16.9 billion on $8.10 in profit.

More critically, Wall Street was waiting for the profit margins, which have been moving downward in recent years. This quarter should show how meaty Google’s core business is when its costly ventures are stripped away.

It’s higher, but not by much. For this quarter, Google’s operating income was $6.7 billion for a margin of 32 percent. For the same quarter last year, Google reported $5.6 billion in operating income, a 31 percent margin. The stock went up 8.24 percent in after-hours trading.

Notable Replies

  1. In the future, all restaurants will be Google.

  2. pjcamp says:

    I'm no friend of Apple, but I'll say the same thing here that I did when Apple was riding high: nobody stays there forever, and no company is really worth that much. When stocks are overvalued, they inevitably fall.

  3. I'm sure not an analyst, but doesn't Apple's P/E reflect the ephemeral nature of it's products and business model? RIM was bulletproof until complacence about it's corporate customer base and a few bad decisions left it a shattered corpse. Earnings today seem a small guarantee of future earnings. The nature of Google's model seems more resilient, and self perpetuating. Other searchers have tried to take a bite of it's lunch, with not too much success. On the other hand the iPad market is saturated and Android phones are extremely good, many like the excellent Moto G at a fraction the price of an iPhone.

  4. Is it OK to hate Google now?

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