Google Loses Share Price War With Apple

By Douglas A. McIntyre Published Aug 21, 6:47AM EDT

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Apple Inc. (NASDAQ: AAPL) split its shares, and Google Inc. (NASDAQ: GOOGL) split its, although in a different fashion. In the stock price increase war since the events, Apple has won handily. The anticipation for the iPhone 6 has overwhelmed Google’s growth dominance in Internet advertising, both on PCs and mobile devices.

In the past three months, Google’s shares have risen 8%, which is less that the 10% advance in the Nasdaq. Apple’s have spiked 16% over the same period.

The two tech giants are among the three most valuable, based on market cap, of any company traded on U.S. exchanges. Exxon Mobil Corp. (NYSE: XOM) rounds out that group. Apple’s market cap is $439 billion, Exxon’s $403 billion and Google’s $257 billion.

Google holds the edge in recent growth. In the most recent quarter its revenue rose 23% to $16 billion. Apple’s revenue rose 6% to $37.4 billion. Although operating income and balance sheet considerations are also part of any evaluation, each company is wildly profitable and carries huge cash positions. Growth companies continued to be measured by their top line improvement ahead of almost all other considerations.

Google and Apple share one thing in common. Each tends to be analyzed primarily on one measure. In Google’s case it is search advertising, and in Apple’s it is iPhone sales. Both companies have plenty of other businesses. Among Google’s most important are Android and YouTube. Neither brings in enough revenue to be terribly important. Apple has its media distribution and app business, along with iPad and Mac sales. Very few analysts look at these smaller businesses over Apple’s flagship smartphone.

Unlike Google, Apple is largely a single-event company. It launches a new iPhone every year or so. Its market value is pegged primarily to the success of each iPhone generation. A poor launch can hinder its stock performance for months. Google, on the other hand, has relied primarily on the performance of its original product, which has improved, but not changed radically, since the company went public a decade ago.

All of this goes to say that if the iPhone 6 release meets with a poor reception, Apple’s share performance and Google’s will change places.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.