Alphabet officially dethrones Apple as the world’s most valuable company

Google Owner Alphabet surpasses Apple as the world’s biggest company

Alphabet, the company that owns Google, has overtaken rival Apple in Monday’s extended trading to become the highest valued company in the world. Alphabet now comes before Apple atop the list of the world’s most valuable companies.

Operating income from its core businesses rose 23% in 2015. Investors liked what they saw and shares spiked 8% in after-hours trading. The Mountain View, Calif. firm generated $21.3 billion in revenue, beating Wall Street estimates of $20.8 billion. Earnings were $8.67 per share, beating estimates of $8.09 per share. The company attributed its strong revenue growth to search ads, YouTube and programmatic advertising.

The firm’s quarterly profit increased five percent to reach $4.92 billion (4.51 billion Euros), the result of solid online advertising revenue as customers used their services to search for holiday gifts.

“This holiday season, we found that shopping moments replaced shopping marathons,” said Google CEO Sundar Pinchai, hinting that allowing customers to consider and browse was part of the company’s formula for success.

By changing its name and structure last year, Alphabet Chief Executive Officer Larry Page has put the focus on the companyโ€™s main web business while giving more insight into investments in new areas such as artificial intelligence, self-driving cars, health technology and fast Internet access. Even though Apple has also been building expertise in cars and AI, the secretive company has kept much of that under wraps.

โ€œAlphabetโ€™s core business looks very healthy,โ€ Josh Olson, an analyst at Edward Jones & Co., said. โ€œThatโ€™s going to build investorsโ€™ confidence about the other bets theyโ€™ve been making.โ€

Also, as more people use smartphones and tablets for a rising amount of daily tasks, the global reach of the extremely popular search engine at the heart of the company’s business has continued to climb. Alphabet sales are estimated to climb 16 percent this year.

Google and Apple have worked to improve mobile computing, and their competition has seen Apple’s iOS smartphone operating system fight out against Google’s own Android for dominance since the latter emerged on the market in 2008 and became the system of choice for Samsung. The South Korean tech giant is in turn Apple’s major competitor in smartphone production, and the two are involved in litigation over patent infringement.

According to FactSet, with Alphabetโ€™s Class A shares trading at more than $810 each after the close, the companyโ€™s market value appears to be somewhere in the general ballpark of $560 billion, thatโ€™s more than enough to overtake Appleโ€™s nearly $535 billion market value.

If the share price continues to rise into trading today, it will be the first time that Google has taken the crown of the world’s biggest company, dethroning Apple which has held the title for around three years. Last week, vaule of Apple shares decreased after the company foretold that it would record its first revenue fall in 13 years. Also, the recent news that Apple was expecting the first ever drop in sales for its smartphone have led to speculation that the firm’s significant growth could finally be coming to an end.

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Kavita Iyer
Kavita Iyerhttps://www.techworm.net
An individual, optimist, homemaker, foodie, a die hard cricket fan and most importantly one who believes in Being Human!!!

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