Can Apple Hold Its Place as World’s Most Valuable Company Again in 2017?

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For several years, Apple Inc. (NASDAQ: AAPL) has been the world’s most valuable company based on market cap. Its rise largely has been driven by the wild success of the iPhone family of products. As worries increase about whether the iPhone 7 sold well over the holidays and can keep a quick sales pace until the iPhone 8 is introduced, probably late this year, challengers have a better chance to catch it than at any time in recent history.

Apple’s market cap is currently $618 billion, well ahead of Alphabet Inc. (NASDAQ: GOOGL) at $540 billion and Microsoft Corp. (NASDAQ: MSFT) at $484 billion. Behind Microsoft, Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-B) has a market cap of $402 billion, and Exxon Mobil Corp.’s (NYSE: XOM) is $374 billion.

If Apple does lose its place, it may be because its value drops more than that any of the other top companies surge. Apple’s current stock price is $115. However, last May, it dipped below $90 after Apple’s revenue contracted for the first time since the first iPhone launched in late 2007.

The Nikkei Asia Review recently reported that iPhone production in the first quarter of this year will drop 10%. That is because, according the analysis behind the article, iPhone holiday sales were slow. If Apple did not ship more than 70 million iPhones in the final quarter of 2016, investors likely will turn on the stock and could trigger a kind of brutal sell-off like the one that marked last spring.

Apple’s quarterly results for the holiday period will be posted on January 24. That is the date, near term, when Apple’s stock price will be most vulnerable. If iPhone sales are well below analysts’ estimates and forward guidance is weak, Alphabet and Microsoft each has a chance at first place by the market cap measure.

The other side of the analysis is how well Alphabet and Microsoft will do when they post their numbers for the most recent quarter. Both Alphabet’s and Microsoft’s will come out on January 26. The core measure of Alphabet’s health are advertising metrics for Google, both the number of people who click on ads and what the ads fetch from marketers. Investors also watch divisions that have become important more recently. First among these is the revenue from YouTube, the world’s largest video destination.

Microsoft investors will focus on its cloud computing business, an important part of which is artificial intelligence. CEO Satya Nadella has put so much stock in the new tech sector that he recently said:

We are not building an AI-first world. We are building a people-first world with AI everywhere. Ultimately, technology is in the hands of humanity. It is up to us to imagine the future and shape it using technology.

Microsoft has to compete with Amazon.com Inc. (NASDAQ: AMZN), Alphabet and a number of second-tier players to realize Nadella’s vision. Based on recent Microsoft earnings, the company is already well along the path.

Whether Apple can keep the most valuable company in the world crown is more in its own hands than others. But it will take only a modest slip in results for its ability to stay on top to be questionable.