Alphabet, Apple, Microsoft Jockey for Record Valuations

Microsoft, Apple and Google are flirting with achieving the $1 trillion valuation threshold, according to a series in the Financial Times that predicts Google’s parent company, Alphabet, will cross the trillion-dollar finish line first, within the next three years.

Apple is the closest to the trillion-dollar market cap at $927 billion, but its revenues are heavily based on iPhone sales (60%), which are flat compared to other company incomes. Analysts expect Microsoft’s mobile and cloud computing platform expansions to ramp up revenues, but it remains behind Amazon’s Web Services for selling raw computing power.

Writer Richard Waters, based in San Francisco, analyzed the companies’ projections and determined that Alphabet’s acceleration of profits in the past three years indicates that it will surely surpass the mark in another three years. Alphabet derives 99.5% of its revenues from Google, which is making four times more now than in 2011. Google estimates $26 billion in new business this year, largely because of its growth in digital ad revenues.

The main threat to Google’s standing is either political or regulatory restrictions, but the company’s success in adapting to new European privacy laws has enabled it to pick up business from American companies that have failed to adhere to the new model.

Another Alphabet company, YouTube, stands to grow its ad revenues by 20-30 percent each year, according to Mark Mahaney, an analyst at RBC Capital Markets.