Google parent Alphabet replaces Apple as the most valuable company

Apple overtook Exxon Mobil to become the most valuable company in the U.S. in 2012, another milestone for the company that was resurrected from near collapse after the return of co-founder Steve Jobs in 1997. Apple and Alphabet have come closer in recent weeks, but it was stellar fourth quarter earnings from the search giant that pushed it into the lead on Monday.

Thanks to the restructuring, on the 1 of February, Alphabet reached a value of $533.2 billion, whereas Apple’s value was “just” $532.7 billion.

Google is serving more ads and at better margins, while Apple’s core iPhone segment is slipping, prompting the company to consider a smaller and cheaper phone to prop up sales, though it would likely have narrower profit margins.

However, while the group’s financial results spurred a brief spike in stock market value, the company took a hit on Wednesday, closing the day with shares down five per cent.

At close today, Alphabet was trading at $726.95, a decrease of 4.93 percent compared to yesterday, giving it a market capitalization of $499.94 billion. Alphabet’s market cap is now about $547.1 billion as opposed to Apple’s $529.3 billion. Thats going to build investors confidence about the other bets theyve been making. That exceeded analysts’ average projection for $16.9 billion, according to data compiled by Bloomberg. US Treasury official Robert Stack accused his European Union counterparts of unfairly targeting US companies in its tax investigations.

Alphabet’s non-core projects continue to be a drain on the company’s profitability though Google’s capex spending on these businesses has slowed down considerably. On the other hand there isn’t much that Apple can do in their major domain- the smartphone market. Cloud revenues are derived from providing other companies with computers and other services hosted by companies like Google, Amazon, Microsoft and IBM. The company’s opaque accounting made it hard to know just how much profit Google reaped from its primary business – selling digital ads next to everything from search results to YouTube videos.

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Alphabet is notably expected to ramp investments in Google projects such as virtual reality as well as big bets including the Fiber ultra-high speed internet service it has launched in some U.S. cities.

The company said consolidated revenue jumped 17.8 per cent to $21.33 billion in the fourth quarter ended December 31, from $18.10 billion a year earlier. Apple’s net income was three times that of Google’s for the last quarter.