Apple briefly lost the title of world’s most valuable company this week, as Alphabet (Google’s parent company) overtook the Cupertino tech giant on a stock bounce the day after it released its quarterly earnings report late Monday. Alphabet only held the title for a day, though, as Apple climbed back throughout the rest of the week. Here’s why Alphabet and Apple are neck and neck.
Alphabet (Google) Beats Apple
On Tuesday, Alphabet’s stock value climbed in trading by more than three percent, after the main revenue-generating division of the umbrella company (hint, it starts with a “G”) propelled Alphabet to beat earnings expectations.
Alphabet posted earnings of $8.67 per share, when expectations were closer to $8.10, while total revenue growth shot to $21.3 billion over last year’s $14.5 billion, beating the analysts’ estimate around $16.9 billion.
After the company posted its stronger-than-expected Q4 earnings report on late Monday, shares in Alphabet shot up eight percent in after-hours trading, followed by the three percent rally on Tuesday. Put together, Alphabet’s market capitalization surpassed Apple’s by more than $10 billion at the end of trading, with Alphabet at more than $540 billion compared to Apple’s drop to less than $530 billion, according to MarketWatch.
Alphabet Structured for Growth
Part of the trick for Alphabet’s big, though temporary, victory over Apple this week was the difference in growth rates between the company, which can be traced in part to the very reason for Alphabet’s existence: restructuring Google’s vast array of projects to make more financial sense.
As The Guardian reported, in the past six months alone since Google created Alphabet to house all of Google’s more ambitious projects and separate Google’s core business from them, the company’s market cap has risen by $200 billion.
Tellingly, the non-Google side of Alphabet posted a net loss on Monday, while Google’s outstanding revenue growth pulled the company into beating earnings expectations. It helps that now Google’s effective tax rate has dropped to 5 percent from 18 percent previously, as MarketWatch’s earnings blog noted. And Monday’s was Alphabet’s first earnings report where it broke out Google from its “other bets.”
While Google is a solid earnings machine, investors also do see many of Alphabet’s “other bets” as a potential for future growth. Future technologies like autonomous cars, which are often called “Moonshots” by Google (until they become a reality), drive investors’ optimism for break-out returns on investment, even if it’s a long-term bet.
Apple’s iPhone Slow-Down
Of course, it didn’t help Apple that it famously posted the first deceleration in the growth of its iPhone revenue this quarter. Many investors see it changing from a high-growth tech stock to a healthy, but boringly stable value stock.
As far as growth potential — especially in the mid-to-long term — Apple doesn’t seem to have as many ideas in the pipeline as Alphabet does.
Alphabet’s Bounce Ends
Nevertheless, Apple took the title of world’s most valuable public company on Wednesday, after a short selloff of Alphabet’s stock following news that the head of search at Google was retiring. Alphabet lost seven percent of its stock price by Thursday, and its market capitalization cratered back below $500 billion.
The steady-but-boring Apple rose a couple percentage points at the same time, beating Alphabet to regain its title by more than $40 billion.
If you think that’s the end of the neck-and-neck competition for “world’s most valuable company,” you’re mistaken. It’s likely that Alphabet and Apple will be effectively tied for that title, with each gaining the edge now and then, for a while.
Interswitch is the Most Valuable African Startup
Interswitch, the leading payment processing company headquartered in Lagos, Nigeria, is Africa’s most valuable start-up at a US$ 1 billion valuation.
Founded in 2002, Interswitch uses switching infrastructure to connect different banks in Nigeria and powered banks’ ATM cards. Presently, the company has over 11,000 ATMs on its network.
In 2010, Helios Investment Partners bought two-thirds of the company and in the following year, Interswitch bought a 60 percent stake in Bankom in Uganda.
Interswitch owns Verve, Nigeria’s most used payment card, and accounted for 18 million of 25 million cards in circulation in Nigeria. The company also owns Quickteller and recently purchased VANSO, a mobile-focused technology provider to banks.
Like Interswitch, Stripe, the company that acquired Nigeria’s Paystack for over US$200 million, is the most valuable startup in the USA at over US$70 billion valuation.
Klarna, Nubank, Paytm and Grab leads in Europe, Latin America, India and Southeast Asia with valuations of US$10.65 billion, US$10 billion, US$16 billion and US$14 billion, respectively.
E-commerce Black Friday Sales Estimated to Surge by 40% to 10.2 Billion
The 2020 holiday shopping season will be unique, as the pandemic shifted consumer behavior from retail stores to online shopping. In response, many retailers moved their services online to not miss out on this year’s profits. Atlas VPN team decided to look into how e-commerce sales are set to perform in the upcoming long weekend.
Researchers predict that the US e-commerce revenue will exceed last year’s earnings by 49.5% on Thanksgiving day, totaling $6.18 billion in revenue. Black Friday is calculated to reach $10.2 billion in sales, exceeding last years numbers by 39.4%
Rachel Welch, COO of Atlas VPN, shares her tips on how to stay safe when shopping online during the holiday season:
“Watch out for too-good-to-be-true deals from unknown sellers, as cybercriminals will also expect to turn a profit during the holiday season, even though they are not selling anything, except maybe a bag full of disappointment.”
Finally, analysis shows that on the last day of the long and full of special offers Thanksgiving weekend, consumers will go all out to bring record sales for e-commerce businesses, adding up to $12.89 billion.
To look at these five days from a wider perspective, e-commerce companies can expect to earn around 39.72% more than they did last year.
Alibaba Merchants Sell $40B in First Half Hour of Singles Day 2020, More than 2019 Event Full Sales
Singles Day 2020 was a roaring success, cementing its position as the world’s biggest shopping holiday. Sales across Alibaba’s platforms during the event totaled $74.1 billion, up from $38 billion in 2019.
According to the research data analyzed and published by Stock Apps, within the first 30 minutes of the event, the gross merchandise volume (GMV) surpassed 2019’s full-event sales, reaching $40.87 billion.
Moreover, instead of live events, Alibaba had 400 company executives and 30 celebrities hosting livestreams. Based on a study by Coresight, the Chinese livestream market is set to rack in sales worth $125 billion in 2020, compared to $63 billion in 2019. The US livestream market is a small fraction of that, valued at $5 billion.
China’s Tech Heavyweights Lose $280 Billion in Market Cap
Alibaba Singles Day 2020 dwarfed other major shopping holidays as has been the trend in previous years.
According to Practical eCommerce, Amazon Prime Day 2020 sales totaled $10.4 billion up from $7.16 billion in 2019. Cyber Monday sales in the US amounted to $7.9 billion in 2020 according to Statista. Black Friday and Thanksgiving added $9.7 billion to the figure to make $17.6 billion for the weekend.
Similarly, in 2018, Singles Day sold $30.8 billion while Prime Day sold $4.19 billion and Thanksgiving weekend got $14.2 billion.
However, the 2020 Singles Day event came in the wake of Ant Group’s suspension of a $37 billion listing. The suspension resulted in a $76 billion drop in Alibaba’s market cap, as the tech giant owns a two-thirds stake in Ant Group. Moreover, China’s regulators released anti-trust draft rules prior to the event, aimed at controlling monopolistic behavior.
Following the release, Alibaba shares plunged by 9.8%, as JD.com shed off 9.2%. Tencent similarly saw a 7.39% drop and Xiaomi fell by 8.18%. For the five companies, there was a combined loss of $280 billion in market capitalization.
Business2 months ago
Npower News on Permanency for Batch A, B
Forex2 months ago
Naira Improves Against Global Counterparts on Black Market
Business2 months ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Forex3 months ago
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Business3 months ago
Again, UBA Reduces International Spending Limit on Naira Card as Forex Scarcity Persists
Cryptocurrency2 months ago
Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue
Business2 months ago
FG to Absorb Exited N-power Beneficiaries into New Program
Stock Market3 months ago
Zenith Bank Declares 30 Kobo Interim Dividend for H1 2020