Google’s latest reported profits and sales went way beyond estimates, putting the company in position to displace Apple as the world’s most valuable company.
Google reported its results this week under a new structure separating Google’s main search and advertising revenue from other, riskier investments.
According to fourth quarter revenue results, Google’s sales rose from 19% to $17.3 billion, trumping the estimated $16.9 billion growth data put together by Bloomberg. Their profit was $8.67 a share, while Bloomberg’s prediction was only $8.08.
Google has made big gains in investor confidence with their trend toward artificial intelligence, self-driving cars, and health-related technologies. In addition, their new structure gives outsiders a better view of Google’s investments and financial structures.
Google’s main business, headed up by CEO Sundar Pichai, is developing resources to improve ads, delivery, and marketing accuracy—all of which are likely a big part of the remarkable growth of the company. And the public is paying attention: In the last quarter, total ad clicks were up 31%.
However, the picture isn’t all rosy for Google. They’re still losing billions of dollars a year on their more risky investments, such as high-speed Internet, robotics, and self-driving cars. Sales in 2015 for “Other Bets,” a term for Google’s investments beyond its well known Internet products, were at less than half a billion dollars, with investors losing more than $3.5 billion.
Still, Google is likely to keep rising overall, especially given insight shared by Alphabet CFO Ruth Porat. (Alphabet is Google’s parent company.) In an interview, Porat noted that Google continues to benefit from the increase in mobile search, which isn’t likely to be going anywhere any time soon.
At the moment Alphabet has nearly $75 billion in cash, up from $64 billion last year. So the coveted “World’s Most Valuable Company” really isn’t that far off.