Apple could soon lose its place as world’s most valuable company to Google

“Apple Inc. could lose its spot as the world’s most valuable company in 2016, with Google marching toward new highs as the tech giant cements its dominance in the smartphone market,” Sara Sjolin reports for MarketWatch.

MacDailyNews Take: Such massive “dominance.” And, now for some reality:

• Apple’s iPhone can soon reap 100 percent of world’s smartphone profits – November 17, 2015
• Apple’s iPhone owns 94% of smartphone industry’s profits – November 16, 2015

“As of Tuesday’s close, Apple’s market value stood at around $550 billion, roughly $50 billion above that of Google parent Alphabet Inc.,” Sjolin reports. “That’s about the closest the two have been since 2010.”

“‘Apple is now only more valuable than Google because it is holding on to more cash. Stripping out each company’s net cash, then Alphabet is officially more valuable than Apple,’ said James Cordwell, digital analyst at Atlantic Equities,” Sjolin reports. “‘If investors’ hopes and fears are realized, you could see Alphabet establishing clear water in its valuation versus Apple, though we would look at that as creating a great buying opportunity in Apple’s stock,’ Cordwell said. He keeps an overweight rating on Apple with a target price of $140.”

Read more in the full article here.

MacDailyNews Take: Judging by Apple’s, um… incomplete efforts of late, a theoretical kick in the ass such as being surpassed atop the market cap heap by the likes of Alphabet Inc. might not be such a bad thing.

Whatever it takes to reignite the fire for attention to detail in Cupertino is A-OK with us.

Complacency kills. Execution matters.

SEE ALSO:
Apple regains ‘World’s Most Valuable Company’ crown – August 1, 2013
Apple overtakes Exxon Mobil as world’s most valuable company – August 9, 2011

36 Comments

    1. Could go either way.

      Google has unlimited growth prospects even doing nothing — just by sitting on its Internet advertisement business — almost all other businesses of Google brings no profit or even losses.

      Apple’s business is much more complicated. The company has to innovate every year in its every main product line to keep its #1 spot. It is always hard earned every year.

      For this reason, investing in Google’s shares is usually safer bet, less risky.

      1. Every tech company except Apple is considered to have unlimited growth potential. Only Apple is said to have zero growth potential because Apple is run by weaklings. No one at Apple will dispute the fact and it’s really pathetic for loyal shareholders. Apple could really hurt Google’s ad business if it wanted to yet does nothing but watch Google get stronger by the day.

      2. @DeRS: Online advertising is a dying business. Alphabet’s cash cow is sick.

        Also, Apple does *not* have to innovate every year. Apple’s “annuity” business lines alone bring in more net profit than Alphabet’s entire operation. Don’t get taken in by the FUDsters nonsense.

        Alphabet is both poorly managed and its primary business is in jeopardy. That’s a dangerous combination…

          1. Yes, I guess you did: Google’s cost-per-click metric is now in a long term secular decline (many quarters now). Also, its traffic acquisition costs continue to increase.

            These fundamental problems show up in Google’s relatively poor top and bottom line growth results yet, strangely, Wall Street chooses to simply ignore these obvious signs of trouble. Go figure…

  1. That’s just insane. Apple’s profits dwarf Google’s. The only profitable part of Google is its advertising business. For some reason that doesn’t bother Wall Street at all.

    1. It’s even worse with Microsoft. The company actually is in some transition disarray, but Wall Street seems smitten by CEO Nadella and now the P/E is more than 3X Apple’s P/E and it happened in less than a year. Apple has more than double the revenue of Microsoft, but investors believe Microsoft is a better run company than Apple.

      It’s that mindshare thing again. Big investors believe Apple is for losers and maybe they’re right. Apple’s institutional ownership never grows despite profits, buybacks and dividends. It’s very hard to explain that except in terms of poor growth potential.

      1. Listening to Nadella speak is like reading the boss’s lines on a Dilbert strip…an incomprehensible buzzword-salad. It’s literally word-vomit. I’m not surprised Wall Street is lapping it up.

    2. The correction is coming. It’s only like it is now as that’s the best way of fleecing as many gullible investors as possible. Someone is going to make an absolute mint off these idiots.

  2. My bet is that AAPL is being artificially kept low because the results are about to be announced and a lot of Wall St. types are wanting to make a quick profit when the numbers make the stock jump.

  3. Google is beating Apple in the Mindshare category on a number of fronts. Apple was there once, and is starting to fade. Google is there now and will most definitely fade. What matters is what’s left- quality of products and services.

  4. Apple makes the best computers on the planet, and yet small details — those things that make the platforms great — seem to be neglected for far too long. They seem to be seduced by introducing new things, rather than refining existing things.

    There’s been a lot of change at Apple, and there’s more to come. 2016 will probably be another quiet year, and then they’ll move into their new campus and it’ll be a brand new beginning… interesting times to come.

  5. Google/Alphabet has all the mindshare at this point and will very likely become a more valuable company than Apple. Same with Amazon and Microsoft. These companies know how to get the news media to rally around them. Most big investors are being led to believe Apple is already a dying company. It’s too bad Apple doesn’t have an aggressive media and press division. The news media and the pundits can easily ruin any positive points Apple has as we’ve already seen it being done. Apple never has anything to say in defense when the news media puts out all of these bogus stories of Apple being doomed. Sometimes a company can’t merely rely on good products to get the word out to the people who don’t buy Apple products.

    Apple is the only highly profitable tech company with a P/E in the 10.x range and will likely go even lower. It just shows how pathetic Tim Cook is when it comes to putting investor value into the company. The big investors see Apple as a turkey for an investment. Who can blame them? Take 2015 as an example. All that money was coming into Apple and what do shareholders get? Some lousy negative share gains. How do you sell investors some crap like that?

    1. > Take 2015 as an example. All that money was coming into Apple and what do shareholders get? Some lousy negative share gains.

      How is that Tim Cook’s fault? Tim is pulling in record profits for Apple. If Wall Street won’t reward that, it’s hard to see what he could do differently. If his job is to make Apple insanely profitable, he has done so. Apple is down because of this pervasive notion on Wall Street that “Apple’s sales are so good, its profits are so high, that it can’t possibly get any better than this. This has to be the peak and it’s all down hill from here.”

      If that’s what Wall Street believes after quarter upon quarter of record profits, what is Tim Cook supposed to do differently to calm this irrational fear that we’re currently at “peak Apple”?

  6. Steve Jobs was ruthless. Plenty of anecdotes and stories about his merciless treatment of less then perfect performance of his engineers (and their devices). Working under Steve Jobs was apparently a very strange mixture of primal fear and exhilaration. You knew your were working on something historic, but you were utterly afraid for your job all the time, for not delivering what Jobs was expecting. This combination of fear and thrill may have been the most efficient motivator for engineers and teams. With Jobs gone, there isn’t such a motivating factor. While the engineers are still just as brilliant as they were before, the adrenaline seems to be flowing less often.

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