Monday, Alphabet reported that its revenue rose 19% to $17.3 billion in its fourth quarter, beating analysts’ average estimates of $16.9 billion.
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Google formed Alphabet in August 2015 to house Google and its other companies, including side projects from space exploration to self-driving cars.
Alphabet’s market cap is now around $560 billion, while Apple, formerly the most valuable company, has a market cap of $540 billion. Alphabet Inc. and Apple have danced closer in the past few weeks, but it was stellar Q4 earnings from Mountain View that pushed it into lead on Monday, Feb. 1. It is an indication that Google’s core business is thriving. The company, however, suffered losses of up to $3.6 billion in moonshot projects and “other bets” previous year.
Other revenue for Google, which includes Play, Cloud and Apps, came in at $2.1 billion, up 24 per cent year-on-year.
The big gain for the company was advertising.
Alphabet shares closed at $761.35 on Friday, valuing the company at about $517 billion, 4.4 percent shy of Apple’s valuation of about $540 billion.
Industry tracker eMarketer expected Google remain the dominant player in worldwide search advertising, raking in $45.58 billion in revenue this year to claim a share just shy of 57 percent of the overall spend.
Alphabet’s claiming of the most valuable company title has been seen by some as a passing of the technology baton.
Other Bets: “Access/Google Fiber, Calico, Nest, Verily (formerly Google Life Sciences), GV (formerly Google Ventures), Google Capital, X (formerly Google [X]) and other initiatives”.
That second category’s numbers were not as impressive as the Google segment’s were, however.
Apple is in for a rough second quarter as the company is expected to announce its first ever decline in iPhone sales and its first year-over-year revenue drop in thirteen years.
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Alphabet’s results show Google is still absolutely core to its success, with an operating profit margin of 31 percent. “Given the early stage nature of a number of these efforts, they are likely to require additional investment prior to generating very meaningful revenues”, said Ruth Porat, Alphabet Chief Financial Officer.
