Alphabet shares jumped more than five percent to $790.50 on earnings figures that beat expectations. The market capitalization of the previous exchanges champions Apple was overhauled at least outside the official trading hours.
Alphabet is now holds a value of around $568bn, compared with Apple, which has a value of $535bn.
On the other hand, Alphabet Chief Financial Officer Ruth Porat explained how they made the significant improvement.
Google’s massive search-ad operation is basically functioning as an incubator for Google’s “Other Bets”, which includes its self-driving vehicle project and glucose monitoring contact lense. Interestingly, 99% of Alphabet’s revenues came from Google and other “core” businesses, the details of which can be found here. Of these, $21.3 billion (€19.5 billion) were recorded in Q4, of which $4.9 billion (€4.5 billion) was net income alone. Sadly, this also means we still don’t know how much Alphabet spends on self-driving cars and Project Loon, for example.
The sum of the total operating costs was mostly from the thermostats and smoke detectors from Nest, the Internet balloons of Project Loon, the investment in medical research of Verily, robots and other undisclosed moonshot projects of Google X.
The two companies’ operating systems and apps are in direct competition with each other and Apple is still fightng in the courts with Samsung Electronics, the biggest Android smartphone maker. Last week Apple reported the largest quarterly earnings in corporate history, but its stock slid, amid concerns about slowing iPhone sales.
Pichai said that Google is seeing “incredible progress” with enhancing services with artificial intelligence. The agreement was seen by some as too lenient for the internet giant.
Analysts said that, like Facebook, Google’s advertising business continues to grow despite the transition of users to mobile devices.
“As Google continues to diversify its ad offerings, we expect YouTube to play an increasingly important role to Alphabet’s earnings”, said eMarketer analyst Martin Utreras. Thing is, Google expanded into more than just search engine, email, and mobile.