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This week represents a historic phase for the stock market as Google’s Alphabet manages to outrun Apple, becoming the company with the highest value in the world.
Alphabet’s shares experienced a 4.7% rise on Tuesday afternoon, after a very successful quarterly report. As a result, it is now valued at $548bn, in comparison to Apple’s $534bn.
The share prices of Apple quickly took the lead again by the end of the day, however the competition now is fiercer than ever, with analysts being confident that Alphabet will win the market again.
This groundbreaking news follows a controversial period for Google, with the company being under scrutiny over its tax breaks. The European Commission is currently examining several deals made with the UK, which resulted in the company paying an insufficient amount of taxes.
US Treasury official Robert Stack hit back at these accusations by stating that US companies are being unjustly targeted.
Google made the decision to change its name to Alphabet in August 2015 in an attempt to give the public and the investors a better representation of all the businesses that they control.
Aside from the investments that Alphabet has made in YouTube and the Android operating system, the company also has an involvement in large projects such as developing robot cars, biotechnology, high-speed internet fibre networks, as well as various “moon shot” enterprises.
Just to give a clearer picture of the numbers that are in play, it is worth mentioning that in 2017 the company saw revenues of $74.5bn and profits of $23.4bn only from their core businesses, with another $448m from their other categories.
Apple is not falling short, however. In 2012 it won the battle against Exxon Mobil and became the most valuable company in the world. For the last quarter of 2015 it reported a profit of $18bn and at its maximum success it was valued at $760bn.
According to analysts, within the next 12 months, Apple could be valued at $748.5bn, with a median price target of $135.
Carl Icahn, one of the Apple investors, believes that the company is currently undervalued and that it should trade at $240 per share.
There are however concerns that the demand for the iPhone is starting to fall behind and that the technology giant needs to advance with a better product in order to regain their status, as well as their market position.
Image Source: TechRadar