Alphabet (Google) could soon become the most valuable company in the world. Investors value the search firm’s earnings from rapidly growing digital advertising more than twice as highly as Apple’s in a saturating smartphone market. As a result, investors expect little growth in the company’s top line this year and are paying only about 10 times estimated 2016 earnings for the stock.
A subpar earnings report from Apple next week, or a strong one from Alphabet the week after, could bring a new name to the top of the world’s most valuable companies list. Moreover, some of Alphabet’s revenue comes courtesy of iPhone users: it cost Google $1 billion in 2014 to keep its search bar on the Apple device, Bloomberg reports based on transcripts of a court case.