It’s official. Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) is once again a bigger company than Apple Inc. (AAPL), winning back a title it held for only a day back in early February.
Granted, in the grand scheme of things, the two companies’ relative size means nothing in terms of the bottom line either are capable of producing. And Alphabet’s moral victory is hardly a show-stopper — the recent implosion of AAPL shares simply shrunk Apple’s market cap at a rate much faster than GOOGL shares have fallen of late.
Nevertheless, owners of the company formerly known as Google now has access to some new bragging rights, and they’re already milking them for all they’re worth.
Alphabet to Keep the Lead This Time Around
As of the latest check of the scale, Alphabet weighs in $499 billion, and Apple is a $493 billion company. Those numbers can (and likely will) change by the end of the day, though the odds are good Alphabet will still end the session on top.
This time, though, Alphabet is in a position to hold onto that lead for a while.
Apple still is on the defensive from a disappointing quarterly report and an equally disappointing outlook unveiled in late April. Already viewing the glass as half-empty rather than half-full, today’s reports that component suppliers for the iPhone 7 were seeing weak demand led traders to assume the worst.
The 2.6% tumble AAPL shares suffered as a result carried the stock to lows last seen in 2014. Now that Apple is below yet another key price level, it becomes even easier for the sellers to justify tacking on more losses to the 32% pullback that AAPL has made since July of last year.
The next-biggest threat to Alphabet’s dominance in the size race is Microsoft Corporation (MSFT), but with its market cap of only $403 billion, it could be a long while before Alphabet has to put the software giant on its radar.
Bottom Line
The only potential upside of Alphabet claiming the size trophy is the small likelihood that some investors equate size with strength, and would opt to buy GOOGL over AAPL shares for that reason. Investors with that sort of mentality are few and far between, though, and it’s unlikely Alphabet owners will see any measurable near-term benefit to its size.
On the other hand, amateur as well as professional traders can be fickle, and if this displacement of the market’s biggest and second-biggest companies persists, investors may well redefine which of the two outfits is “supposed to be” the world’s largest.
If that new mindset gels, the market may subconsciously give the heir-apparent incumbent a pass and put the pressure on the challenger to prove it deserves to dethrone the established king.
Mostly though, it’s little more than anecdotal stock market trivia.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
