Could Alphabet Inc Crush Apple?
Normally, you wouldn’t expect too much growth from mega-cap securities like Alphabet Inc (NASDAQ:GOOG) stock, formerly Google Inc. But that’s exactly what has happened.
Over the past year, shares of the tech giant have surged more than 40% in value. Google has now overtaken Apple Inc. (NASDAQ:AAPL) as the largest public company in the world by market capitalization. And while the “iGeeks” say the title is only temporary, I think Alphabet will remain on top of the podium for many years to come.
The sentiment around Apple stock has become not so bullish recently due to concerns about China’s economic slowdown. You see, China is Apple’s second-largest market, second only to the Americas. If demand from China were to shrink, Apple could face serious problems in its financials.
Google, on the other hand, is not really worried about China. The company left China’s search engine market back in 2010. So there is not much to lose when China’s economic growth faces concerns. In fact, Google might be able to re-launch its core business in the country.
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Google is on a massive hiring spree in China right now. From software engineers to communications managers, the company is looking to hire more than 50 people in the country. (Source: “Google Plans to Hire over 50 to Beef Up China Workforce,” Bloomberg, January 6, 2016.)
China’s slowdown in economic growth has cast a large shadow over the U.S. stock market. Since Google’s exposure to China’s market is much smaller compared to Apple, the impact of China’s slowdown on the search engine company might be smaller than its impact on the maker of the “iPhone.”
Google is also beating Apple in another important market: driverless cars.
Nowadays, it’s not just automotive companies that want to build driverless cars; tech giants are in the race as well. In that race, Google is way ahead of Apple.
Google has been testing its driverless cars on the streets of San Francisco for some time now, while Apple’s cars are yet to hit the road. Google has also secured a patent that effectively allows driverless cars to talk to pedestrians through light-up signs on the front bumper or the side of the vehicle. (Source: “Patent No. US 9,196,164 B1,” United States Patent and Trademark Office, November 24, 2015.)
On the talent acquisition front, Google managed to hire software engineer Robert Rose from Tesla Motors Inc (NASDAQ:TSLA). Robert Rose was the lead software engineer for SpaceX’s “Falcon 9” and “Dragon” flight programs. Later on, Rose joined Tesla to lead the “Autopilot” team and helped to develop Tesla’s “Autopilot V7.0,” which enabled the autosteer and auto lane change functions. (Source: “Google Looks to Tesla, SpaceX Talent in Driverless Car Push,” Bidnessetc.com, November 30, 2015.)
Meanwhile, Apple is losing one of the key executives in its electric car program. Steve Zadesky, who has been overseeing Apple’s electric car program for the last two years, is reportedly leaving Apple for personal reasons. (Source: “Apple Veteran Overseeing Electric-Car Project Leaving Company,” The Wall Street Journal, January 22, 2016.)
The Bottom Line on GOOG Stock
Google also has a plethora of exciting projects in its “other bets” segment. The company is about to bring its ultra-highspeed Internet and TV service “Google Fiber” to Los Angeles and Chicago. Moreover, Google’s acquisition of Nest Labs might also start bearing fruit, as consumers embrace smarthome systems.
While Apple is struggling, Google has a lot of big projects in the pipeline. I suspect GOOG stock will remain the biggest player in tech for quite a while to come.