“For all intents and purpose, Apple (AAPL) and Alphabet (GOOG, GOOGL) are tied in the superficial race to see who has the largest market cap,” Evan Niu writes for The Motley Fool. “Alphabet surged to take the token title of ‘world’s most valuable public company’ earlier this week in the wake of a strong fourth-quarter earnings release, only to give it back to the Mac maker just a couple of days later.”
“Their valuations are still drastically different,” Niu writes. “Why is that?”
“Apple’s top and bottom lines are meaningfully higher than Alphabet’s, and revenue actually grew more over the past 12 months,” Niu writes. “But Alphabet earns over three times the valuation multiples shown.”
“Generally speaking, valuation metrics are a function of future growth prospects more than anything else. Investors clearly think that… Alphabet is worth a lot more in terms of its future growth potential,” Niu writes. “The market perceives Alphabet as having a plethora of untapped opportunities. This perception is indeed justified considering the company’s penchant for experimentation, but at the same time, the market does not perceive that Apple is capable of the same thing… Here’s the thing: Apple is working on a lot of the same things. They just won’t tell you about any of it.”
Read more in the full article here.
MacDailyNews Take: Apple’s secrecy doesn’t play nearly as well on Wall Street than Google’s pie-in-the-sky proclamations that have low to no chances of ever amounting to anything.
On the biased nature of the media: Apple vs. Alphabet in the ‘most valuable company’ race – February 4, 2016
Apple again the world’s most valuable company – February 3, 2016
Alphabet Inc. surpasses Apple, now the world’s most valuable company – February 1, 2016