As of yesterday, the answer is Apple. Ever since Google IPO'd back in 2004, the market cap it attracted has exceeded that of any other Silicon Valley company. Sure, other tech. companies are larger, IBM and Microsoft to name but two, but Google remained top dog in the Bay Area ever since their birth as a public company. Or they did, until yesterday.
At close of business on the 13th, GOOG had a market cap of roughly $157 billion, while AAPL was listed at $159 billion. Sure, Google is more profitable but, in the view of the market at least, Apple seems to have the better business prospects going forwards.
Wall Street looks at Google and sees something of a one-trick pony. Sure, it's one hell of a neat trick, but it still only numbers "one", and as we head into a period of overall economic uncertainty then their absolute reliance on ad. spending starts to look like a riskier place to be than was the case just 6 months ago.
Apple, on the other hand, has grown quickly and grown consistently, two of Wall Street's most favourite things. Indeed, their top-line performance has been accelerating over the past year, something almost unheard of in a company doing around $30 billion in annual revenues.
The question everyone is asking is, of course, "can it continue?" The market thinks so at least, and Jobs looks to be on course to have a statue erected in his honour at the entrance to NASDAQ's corporate HQ. And this is interesting if only because overall domestic spending is down, the market is in a bit of a funk in general and the poor old US consumer is fighting a pitch battle against the twin evils of higher inflation and a dodgy housing market.
Wall Street clearly reckons that the market for iPhones, laptops and media players will somehow transcend a general budget tightening in families around the world, whilst advertising budgets inside large corporations will not. Me? No idea, other than to say they might be right. Apple sells adult toys that appeal to an incredibly broad demographic these days. And how better to cheer yourself up in the midst of all this financial gloom-and-doom than by buying a nice, new shiny phone to play with??
I'm not about to go and buy an iPhone anytime soon, but I have to say I'm probably in the minority. I might though be tempted by other Apple-goodness as and when they roll out their new offerings just in time to build demand for Christmas, particularly if they wheel out a competitor to this big hunk.
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