Microsoft Is Now More Valuable Than Alphabet (cnbc.com)

Microsoft has surged 40 percent over the past 12 months to become more valuable than Alphabet. "As of Tuesday's close, Microsoft was worth $749 billion and Alphabet's market capitalization stood at $739 billion," reports CNBC. From the report: Microsoft's latest rally has been sparked by growth in its cloud computing business, which is bigger than Google's though it still trails Amazon Web Services. In March, Microsoft reorganized its Windows and Devices Group and moved its engineering resources into other units, including one focusing on cloud and artificial intelligence. Both Microsoft and Alphabet beat analysts' expectations in the first quarter. Microsoft still trails behind Apple's market valuation of $923 billion and Amazon's $782 billion market cap.

Comments

Valuation, not "evaluation"

[sjbe]

Then I learned that Apple reported net income of 50B annually recently.

They've been around that number for the last three years. Please do keep up.

Apparently, marketing works.

Companies don't get to Apple's size without provide a shit ton of value to customers. Might not be value to you but it definitely is value to a lot of people and it sure as shit isn't just marketing.

They probably have the highest markup margin in tech.

No they do not. It's not at all uncommon for software companies to have higher margins than Apple. Microsoft routinely has higher net margins than Apple. On average around 5% higher which is a HUGE amount.

Re: Valuation, not "evaluation"

[Dixie_Flatline]

Literally 100% of the things you named have been done by competitor companies. There are various complains about Microsoft's operating system, or Android. Or are you claiming those OSes have no bugs and no issues? Samsung released a phone that literally burst into flames. While the iPhone 6 was potentially prone to bending, HTC's M8 bent at a similar force, according to Consumer Reports. And to be fair to both Samsung AND Apple, both those companies went back and fixed those issues with their devices. I no more expect a new iPhone to bend as I do a Samsung to catch on fire.

If you want to talk dirty tricks, Samsung is at the top of the heap—it's a well known part of their MO, even in Korea. LG has taken Samsung to court tonnes of times for copying product design. Samsung will copy a product, then just drag out the inevitable court cases until it's no longer relevant, and any penalties they endure are less than the value that they gained by copying. You think Google or Microsoft pay more taxes than Apple does? They've all got teams of well paid accountants telling them how to avoid taxation.

There are plenty of reasons not to like Apple's products, on a product-by-product basis. Siri's a mess, the keyboard on the new laptops is criminally prone to failure AND expensive to replace, and the Mac Pro and Mac Mini are embarrassing in their lack of updates. But every company has duds in their lineup, and Apple is no worse than anyone else.

Maybe you should think about why you're so mad that Apple's products provide value to so many people. If you don't like them, move on.

Equity is not the same as debt

[sjbe]

I'm no expert, but does issuing more shares not just mean you are more in debt?

No. Debt is a different thing. Shares are not a loan, they are a percentage ownership in the company. When you issue stock for sale you are literally selling a portion of the company. Nothing is being loaned. Debt holders typically get repaid before anyone else. Equity holders typically get paid last.

That's not to say that the new owners won't expect a return on their investment but the expectation is that this will come from company growth without a fixed timeline or cash outlay. Generally speaking equity is usually more expensive than debt because the risk to the investor is higher. Research "cost of capital" if you want to understand more.

Aren't shares essentially taking a mortgage on your company, but you do not even have to pay anything back, beyond empty promises.

No they aren't like a mortgage at all. The new owners will expect a return on their investment, this will come in the form of a growing company profits. If the company doesn't deliver those profits at some point the stock price will plunge and the company will either be sold/liquidated or will be unable to raise additional capital. If the company cannot raise capital and isn't profitable then they will go bankrupt.

Re:Apple is a software company

[Eloking]

To be fair, you're comparing a software company to a hardware one.

No I am not. Apple is a software company at its core. No less an authority than Steve Jobs himself has said so publicly. Not a traditional one to be sure but they don't actually make any of the hardware they sell so they by definition cannot be a hardware company. A company is what it makes and for all practical purposes the only thing Apple actually makes themselves is software. They design some of the hardware but that's not the same thing.

According to Business Insider,

Apple : 63% of the revenue come from iPhone Sales (Hardware), 11% from iPad (Hardware), 11% from Mac (Hardware) and 5% from other product (Hardware). Only 11% are from services (software). So it's 89% Hardware and 11% Software.

Microsoft : 11% are from XBox (Hardware) and 5% are from Surface. Then there's 28% from Office Products (Software), 22% from Windows Server & Azure (Software), 18% from others (Most of it is Software), 9% from Windows (Software), and 7% from Ads (Software). So it's 16% Hardware and 84% Software.

I stand my point.