Alphabet (briefly) passes Apple as world’s most valuable company

Something big happened in the past 24 hours. Alphabet, the holding company for Google and a whole load of other companies, passed Apple to become the most valuable company on the planet.

Alphabet overtook Apple when a surge in after-hours trading saw it’s market capitalisation hit US$570 billion, eclipsing Apple’s current market cap of about $535 billion.

The surge came after the conglomerate posted an 18% increase on its year-on-year revenues, largely on the strength of its YouTube and programmatic advertising offerings.

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“Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we’ve been investing for many years. We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people,” said Ruth Porat, CFO of Alphabet.

As CNBC notes, this is not the first time that Alphabet — then trading as Google — has been worth more than Apple. The two regularly traded places between 2008 and 2010. After that Apple stock went through the roof, passing that of Exxon — then the world’s most valuable company — and at one stage reaching a heady US$774-billion.

At that point, fueled by iPhone fever and a cultishly devoted customer base, the Cupertino-based tech giant was worth around US$400-billion than its Mountain View rival.

Since July 2015 however, things have started to change. Hit head-on by a maturing global smartphone market and decreased appetite for the iPad, Apple’s revenue growth has slowed. As a consequence its stock price has fallen 16%.

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Shareholders meanwhile seem to recognise that Alphabet is no longer “just another search company”. In the same period, its stock price has shot up more than 44%. Moreover, its core advertising business hasn’t stagnated, shifting from web to mobile. According to emarketer, Google is set to claim 32% of the world’s mobile advertising business this year, significantly more than the 20% Facebook will lay claim to.

Those revenues are also what gives it the freedom to invest in any number of other technological innovations, from self-driving cars to life extension. According to Alphabet’s earnings reports, those “other bets” brought in US$448-million in revenue for 2015 (US$327-million this quarter). Overall though, these properties lost US$3.567-billion this year, with US$1.942-billion of that coming from the most recent quarter alone.

According to Alphabet, most of the “other bets” revenue is from Nest, Fiber, and Verily, its life extension service.