Alphabet takes over Apple as world’s largest traded company

Alphabet, the parent company of Google, has become the world’s largest publicly-traded company on 2 February, overtaking Apple.

On 1 February, the tech giant posted earnings of $8.67 (€7.95) per class A share on $21.33bn (€19.55bn) in revenue for Q4 2015, more than expected by analysts.

Earnings per share have increased from $6.76 (€6.20) at end 2014. Alphabet’s class A share price currently stands at $780.91 (€715.77).

Josh Spencer, manager of the T. Rowe Price Global Technology Equity Fund, said  that the core business of Google has the main growth driver of this company. He highlighted the recent success gained by Alphabet “largely due” to mobile and the rise of YouTube.

“The formation of the Alphabet holding company last year is part of a new era of financial transparency, brought on by its relatively new CFO from Morgan Stanley – someone more experienced with the ways of Wall Street.

“Google is acquiring more financial acumen to go along with its already powerful tech intelligence – a transition that was powerful for Apple. We would like to see continued developments in terms of capital return, but perhaps not this year,” Spencer added.

Lewis Grant, co-manager of the Hermes Global Equity Fund, highlighted that Google-Alphabet has been “one of the stellar names in its portfolio.”

“The tech giant has branched out into many new growth projects from driverless cars to wearable technology, but they are conducting this activity at a relatively modest scale.

“The Alphabet corporate structure enables investors to better understand the split between the core business and these side-projects, which is particularly important given that these side-ventures are currently loss-making.

“This restructuring is a typical step for a company at this stage of its lifecycle: as growth companies mature we tend to see an increased focus on corporate governance.

“Since we have owned the company, it has delivered strong earnings and these latest results reaffirm the company’s success. It is trading at an attractive valuation and, crucially, the company is still growing,” he said.

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