“Apple Inc. brought in more revenue in the final three months of 2015 than Alphabet Inc. did the entire year,” Jeremy C. Owens writes for MarketWatch. “Ditto on profit, with Apple reporting net income of $18.4 billion in the fourth quarter while Google’s parent company had earnings of $16.4 billion for the entire year.”
So why has Alphabet overtaken Apple as the world’s most valuable company?
“While Apple has posted phenomenal profit and revenue thanks to the iPhone, the company now seems to be transitioning from a high-growth tech stock to a value stock,” Owens writes. “Alphabet, meanwhile, is still growing at a fast rate.”
“Alphabet’s ‘Other Bets,’ broken out in Monday’s earnings report for the first time, are another big reason for investor optimism,” Owens writes. “The potential for future big businesses is also another strike against Apple. Beyond the iPhone, Apple’s iPad and Mac sales are shrinking, and while Apple refuses to specifically disclose sales of its new smartwatch, the first new consumer product category released under Cook doesn’t appear to be moving the needle. Apple executives instead focused on the potential for services delivered through their mobile devices in their earnings call last week, a specialty of Google.”
“Investors will trust Page and Co. to make these big bets because they have paid off in the past, most notably in the form of YouTube, which Google acquired a decade ago for less than $2 billion,” Owens writes. ” Apple doesn’t operate in the same manner… Even Apple’s one high-profile acquisition under Cook, Beats Electronics, was not a bet on future technology but rather a complement to Apple’s current offerings.”
Read more in the full article here.
MacDailyNews Take: Again, the market craves GROWTH (for Apple, iPhone unit sales growth, in particular). Until Apple can realistically promise, or, better yet, actually show growth, all bets are off.
Alphabet Inc. surpasses Apple, now the world’s most valuable company – February 1, 2016