Apple Makes It Impossible for Alphabet or Amazon to Top Its Market Cap

There has been a great deal of discussion about how Amazon.com Inc. (NASDAQ: AMZN) or Alphabet Inc. (NASDAQ: GOOGL) might pass Apple Inc. (NASDAQ: AAPL) in terms of market capitalization. Apple has held the top spot for years and sits at $809 billion. Recently, worries about the iPhone 8 and optimism about Amazon’s share of e-commerce made it appear the Jeff Bezos–led company could catch Apple. Alphabet’s Google search dominance and the growth of divisions like YouTube might have given it a chance to make a run at Apple.

So far this year, Wall Street has shown it prefers the prospects of Apple to the other two companies. Apple’s shares are up 36% to $156. Amazon’s are higher by 31% to $967, and Alphabet’s are up 19% to $945.

While Apple’s market cap is $809 billion, Amazon’s is $474 billion and Alphabet’s $655 billion. Apple’s shares would have to plunge, or the shares of the others would have to make unprecedented surges, for either to catch the consumer electronics giant. In Amazon’s case, the size difference is already massive.

Coming out of the earnings season, Apple has passed a critical test. The first is that the numbers for its most recent quarter were better than expected. iPhone sales reached 41 million, so people are not holding back to buy the iPhone 8, at least in any great numbers. And, the launch of the iPhone 8 in roughly two months is expected to be spectacular.

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On the other hand, Amazon and Alphabet each posted numbers that were fine but not spectacular. Investors fretted about the low margins of Amazon’s e-commerce, which were not enough to balance the ongoing success of its Amazon Web Services cloud business. Alphabet’s earnings were solid, but not strong enough to convince Wall Street that its search business has anything more than a good future. And, the European Union has fined Alphabet $2.7 billion for antitrust rulings against Google.

Many analysts believe Apple’s shares will soar to $200 and its market cap above $1 trillion, primarily because of the strength of the iPhone 8. For the time being, that kind of increase would stretch Apple’s lead over its two rivals so much that it could hold the lead for years.

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