Shares of
Alphabet opened nearly 3 percent higher Tuesday, pushing the technology giant's
market capitalization past Apple to become the world's most valuable public
company.
Alphabet
has a market cap of $547.1 billion, higher than Apple's $529.3 billion as of
9:45 a.m. ET.
The
median share price forecast of 31 analysts who raised price targets after
Alphabet reported strong results on Monday was $924, suggesting that the
company formerly known as Google could be valued at $628 billion in the next 12
months.
Apple,
tracked by 49 analysts, would be valued at $748.5 billion, at the current
median price target of $135.
Apple's
massive market cap is still trailed by Microsoft ($425.7 billion), Facebook
($326.2 billion) and Exxon Mobil ($310.1 billion) to round out the list of the
world's five biggest companies.
Billionaire
investor Carl Icahn, an Apple investor, said in May that the iPhone maker was
"dramatically undervalued" and should trade at $240 per share. At
that price, the company would be valued at about $1.30 trillion.
Alphabet
easily beat Wall Street's forecasts, helped by strong mobile advertising sales.
Alphabet's
shares rose as much as 4.4 percent to $804.50 on Tuesday, valuing the company
at $546.50 billion, making it the world's most valuable company - for now.
Once
allies, they fell out after Google launched its own Android mobile operating
system in 2008.
Alphabet
was already set to take the title Monday night, before sealing the deal Tuesday
morning. At Monday's after-hours levels (which technically reflect an
indication, but not the real-world value), Alphabet's market cap hit roughly
$570 billion, eclipsing Apple's market cap of about $535 billion. Shares of
Apple opened Tuesday down nearly 1 percent.
The last
time Google was more valuable than Apple was in February 2010, when both
companies were worth less than $200 billion. At the time, Apple had yet to
release its first iPad, the newest iPhone on the market was the 3GS, and the
Mac was the company's biggest product line, accounting for one-third of
revenue. Steve Jobs was still at the helm.
Google
was being guided by Eric Schmidt, who would hand control back to co-founder
Larry Page the following year. The company was a little more than half its
current size.
Apple and
Google actually flip-flopped multiple times between 2008 and early 2010, before
Apple went on a historic tear, jumping from $180 billion in value to over $650
billion in September 2012. At that point, the two companies were separated by
over $400 billion. In 2011, Apple passed Exxon to become the world's most
valuable company.
It's hard
to believe that Google was the more valuable company from the time of its IPO
in 2004 until April 2008. Then iPhone madness began.
Google's
latest rise versus Apple began in July. From that point through the end of
2015, its shares soared 44 percent, while Apple's sank 16 percent.
Apple's
main problem is its reliance on the iPhone, which now accounts for two-thirds
of revenue. It's a massive business, but sales in the fiscal first quarter
increased only 1 percent from a year earlier, while iPad and Mac revenue
dropped. Investors are concerned that unless Apple changes course and decides
to compete with lower cost Android manufacturers on price, the iPhone's best
days are in the past.
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