Alphabet is about to close on Apple as the world’s most valuable company.
Google owner Alphabet is getting close to rival Apple as Wall Street’s most valuable company, and big earnings beat by the search leader after the close Monday could give it the boost needed to pass Apple, while a miss might well extend the iPhone maker’s lead.
As time goes by, it’s becoming likely that Alphabet, Google’s new parent company, will overtake Apple in market capitalization. Alphabet closed the week with a market cap near $523.6 billion, to Apple’s $538.3 billion, though Alphabet got within $7 billion of the lead during the week.
That’s a long way from where things stood at the end of 2014, when Apple carried a market value of $643 billion, almost twice Google’s $361 billion market value.
Google did a major reorganization last year, creating parent company Alphabet which helped Google concentrate on its main businesses: core search, YouTube, Android and more.
The company’s largely money-losing, non-search projects in health care, self-driving cars, drones, fast-broadband, smart home devices and other speculative areas moved to Alphabet.
The company is set to break out financial results for these units, starting with Monday’s Q4 earnings report. Analysts expect an overall 18% EPS gain, the third straight quarter of accelerating growth.
Meanwhile, Apple’s smartphone growth has slowed markedly, though the new iPhone 7 expected in September could give renewed energy to the 9-year-old product.
Apple has already acknowledged the iPhone will begin this year with its first quarterly sales decline since it debuted in 2007. The slowdown helped push Apple’s stock price down by 12% since the end of 2014.
Google, though, has maintained its leadership in the lucrative Internet search and ad market while building other popular products in video, mobile, Web browsing, email and mapping. That bundle of Google services brings in most of Alphabet’s revenue and is expected to deliver growth in the 15% to 20% range as marketers shift even more of their budgets to digital services.
Microsoft ($415.8 billion), Facebook ($308.6 billion) and Amazon ($297.9 billion) are the next three highest-valued technology stocks in the S&P 500. Like Alphabet’s stock, Microsoft, Amazon and Facebook all hit record highs in late 2015.
