Four American companies have market values over $1 trillion: Apple, Microsoft, Amazon and Alphabet. Apple Inc. (NASDAQ: AAPL) stock has surged so much that the company’s market capitalization is double that of Alphabet Inc. (NASDAQ: GOOGL).
On a price surge of 64% over the past year, Apple’s market cap has hit $2.20 trillion. In the same time, Alphabet, owner of Google, YouTube and Android, has risen $21% to $1.17 trillion.
Apple has performed better as a company. iPhone sales have hit a resurgence with the introduction of the iPhone 12. It is expected the phone could sell 200 million units this year on the strength of its 5G capacity. The superfast wireless service already has begun to become the world’s standard.
iPad and Mac sales have done better than hold their own against an onslaught of personal computers and tablets from companies like Microsoft and Lenovo.
Apple’s Services business has become its second largest and fastest growing. The unit includes the App Store, Apple TV and the company’s music and storage offerings.
Apple’s revenue could easily rise this year to over $300 billion.
Alphabet, on the other hand, has had its share of trouble. Its primary online ad business struggled midyear as advertising overall was hit by the pandemic. Both Google and YouTube are driven almost completely by the ad revenue market. Alphabet, unlike Apple, does not have several large money-making divisions, which means its business is not terribly diverse.
Google also faces the government’s wrath, but in the United States and the European Union. It has been accused of having a monopoly in the online ad sales business. It and Facebook have such a dominant position together that the charge is at least believable.
The success of Google’s hardware business has been very modest. Its PC and tablet operations have picked up little market share. Its home electronics devices have been dominated by the market share of Amazon and its Alexa-driven products.
Alphabet has tried to get into streaming via its large YouTube user footprint. It would need to do well against Netflix, Amazon Prime and Disney+ to do well. There is no evidence that has happened.
Alphabet also has tried to become a dominant player in the hot cloud computing markets. By most measures, it is well behind market leaders Amazon and Microsoft.
The spread in the market share between the two companies is justified by their current business prospects, and perhaps more justified by their likely futures.