Google’s Parent ‘Alphabet’ Overtakes Apple as the Biggest Company in the World
In August 2015, Google began a massive restructuring effort. No longer would we only see Google, with its many branches and many fingers in lucrative pies, but instead, we would be looking at Alphabet. Alphabet is officially Google’s parent company, encompassing everything the company does under one roof. When the restructuring was announced, few had ill to say about it and Alphabet’s co-founders (Google co-founders Larry Page and Sergey Brin) said that it would allow them to invest in more companies and focus on the “extraordinary opportunities” at Google, both of which seemed like positive outcomes.
As it turns out, that’s not the only positive outcome of the move, as earlier this week, Alphabet overtook Apple as the biggest company in the world. On Tuesday, Alphabet’s shares rose by 4.7% after the tech juggernaut released better than expect results. This rise meant that Alphabet was suddenly valued at $584 billion, in comparison to Apple’s value of $534 billion, seeing the Google parent company knock Apple off the top spot for the first time in four years. This was only the case for a short while, though, as Apple rebounded to take the lead again. However, some are dead certain that Alphabet will be the top dog once more, with Deutsche Bank raising its 12-month share price target for Alphabet to $1,080, which is 40% up on Alphabet’s Monday closing price.
So what does this mean for those who use Apple and Google products? In short, it means a lot.
Apple’s share price has suffered from a 20% decrease between now and 2015 (when the company was valued at $760 billion) and much of that is due to the perception that the company cannot innovate. While iPhones continue to set new sales records and Macs are often the professional’s choice of computer, few people are buying iPods (so few that Apple lumps its sales together with other products) and sales of the Apple Watch and the iPad Pro – while decent – certainly aren’t on par with its successes with the iPhone. Investors are massively hopeful that the company will release something fresh and revolutionary.
While that’s unlikely to happen any time soon (the company’s next releases are said to be the iPad Air 3 and a smaller iPhone), the company is at least working on it. Recently, Tesla Motors CEO Elon Musk revealed that the so-called ‘Apple Car’ is a widely known secret and the company also hired a 3D interface specialist, leading some to believe that the company is also making a virtual/augmented reality headset.
Google users, on the other hand, will likely see the company be even more outlandish and release even more ‘moonshots’. Although Alphabet lost $3.6 billion on these projects last year, it made $16.3 billion thanks to Google’s health. This means that the company will continue to launch Internet-providing balloons (Project Loon), hi-tech glasses (Google Glass), driverless cars and other products that we would never even dream of.
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